What to Expect From Morgan Stanley Earnings

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Morgan Stanley (NYSE: MS) is scheduled to report third-quarter financial results before markets open on Wednesday. In the midst of market uncertainty, this bank has maintained its leadership positions across its core franchises and continued its focus on prudent risk management and judicious expense control.

The consensus estimates from Thomson Reuters are calling for $0.63 in earnings per share (EPS) and $8.17 billion in revenue. The same period from last year had $0.34 in EPS on $7.33 billion in revenue.

This megabank posted outstanding quarterly results this summer, and it may be among the best buys in the banking and investment arena, although it has been underperforming this year. Morgan Stanley is another one of the white glove Wall Street firms that continues to show tremendous growth, and it is running neck and neck with Goldman Sachs as the bank of choice for high-profile initial public offerings, despite this year’s lack of activity.

Trading at a price-to-earnings multiple of nearly 13 times estimated 2016 earnings, that seems extremely reasonable given the 2017 expectations for EPS growth of more than 24%. The company also has $497 billion in cash equivalents on its balance sheet versus $283 billion in total debt.

A few analysts weighed in on Morgan Stanley ahead of the earnings report:

  • Barclays reiterated an Equal Weight rating with a $32 price target.
  • Citigroup has a Neutral rating with a $32 price target.
  • Macquarie reiterated a Buy rating with a $37 price target.
  • JPMorgan has a Buy rating with a $32 price target.
  • Argus has a Buy rating with a $36 price target.
  • Nomura reiterated a Buy rating with a $34 price target.

Excluding Tuesday’s move, Morgan Stanley has underperformed the broad markets with the stock up only 1.8% year to date. Over the past 52-weeks the stock is actually down 4%.

Shares of Morgan Stanley were last trading up 1.7% at $32.32, with a consensus analyst price target of $33.85 and a 52-week trading range of $21.16 to $35.74.

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