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Morgan Stanley Stock Hold Recommendation Reiterated (MS)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- Morgan Stanley (NYSE: MS) has been reiterated by TheStreet Ratings as a hold with a ratings score of C . The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and weak operating cash flow.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass

Highlights from the ratings report include:

  • Compared to its price level of one year ago, MS is up 22.58% to its most recent closing price of 22.80. Looking ahead, our view is that this company's fundamentals should not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 338.6% when compared to the same quarter one year prior, rising from -$249.00 million to $594.00 million.
  • MORGAN STANLEY reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, MORGAN STANLEY reported lower earnings of $0.00 versus $1.16 in the prior year. This year, the market expects an increase in earnings to $2.10 from $0.00.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Capital Markets industry and the overall market, MORGAN STANLEY's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for MORGAN STANLEY is currently lower than what is desirable, coming in at 29.50%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 7.23% significantly trails the industry average.

Morgan Stanley, a financial holding company, provides various financial products and services to corporations, governments, financial institutions, and individuals worldwide. Morgan Stanley has a market cap of $45.09 billion and is part of the financial sector and financial services industry. The company has a P/E ratio of 1149.5, above the S&P 500 P/E ratio of 17.7. Shares are up 17.1% year to date as of the close of trading on Tuesday.

You can view the full Morgan Stanley Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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