Rating Change #2
Morgan Stanley (MS) has been upgraded by TheStreet Ratings from sell to hold. Among the primary strengths of the company is its revenue growth. At the same time, however, we also find weaknesses including deteriorating net income, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.
Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 41.5%. Since the same quarter one year prior, revenues slightly increased by 0.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- MORGAN STANLEY has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, MORGAN STANLEY reported lower earnings of $1.12 versus $2.31 in the prior year. This year, the market expects an improvement in earnings ($1.85 versus $1.12).
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 33.40%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 132.55% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Capital Markets industry. The net income has significantly decreased by 129.9% when compared to the same quarter one year ago, falling from $836.00 million to -$250.00 million.
Morgan Stanley, a financial holding company, provides various financial products and services to corporations, governments, financial institutions, and individuals worldwide. It operates in three segments: Institutional Securities, Global Wealth Management Group, and Asset Management. The company has a P/E ratio of 16.3, above the average financial services industry P/E ratio of 14.7 and below the S&P 500 P/E ratio of 17.7. Morgan Stanley has a market cap of $34.96 billion and is part of the financial sector and financial services industry. Shares are up 33.9% year to date as of the close of trading on Wednesday.You can view the full Morgan Stanley Ratings Report or get investment ideas from our investment research center.
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