Morgan Stanley's shares have now returned 17% this year, following a 28% return last year. The shares declined 44% during 2011. Putting those numbers together, the shares are down 13% since the end of 2010. The shares trade for 0.8 times their reported Dec. 31 tangible book value of $26.81, and for nine times the consensus 2014 earnings estimate of $2.49 a share, among analysts polled by Thomson Reuters. The consensus 2013 EPS estimate is $2.04. Deutsche Bank analyst Matt O'Connor has a "hold" rating on Morgan Stanley, estimating the company will earn $2.01 a share this year, with EPS rising to $2.47 in 2014. The analyst on Friday said there were "several positives" for the company in the fourth quarter, including a 17% margin in its wealth-management business, "driven by broad-based revenue growth quarter over quarter and lower expenses," and a 26% sequential increase in investment banking fees. Morgan Stanley reported several other positive developments, saying it had already met its goal to reduce its fixed-income risk-weighted assets to $280 billion from $390 billion at the end of the third quarter of 2011, and was on track to lower the RWA to $255 billion by the end of 2013, with RWA eventually declining to less than $200 billion by the end of 2014, freeing up plenty of capital for an eventual return to investors. The company also said it would accelerate its purchase of the remaining stake in its brokerage joint venture with Citigroup ( C), to complete the purchase by the end of 2013. Having 100% ownership of the brokerage will enable "greater order flow capture," increase deposit funding and lower expenses by eliminating the joint venture agreements and expenses, according to the company. Morgan Stanley in 2012 reduced its workforce by 7% and said it planned to cut staffing by another 10% in 2013. O'Connor said the company's goal of improving its return on equity to 9% from a slightly negative number in 2012, "implies EPS approaching $3 before capital deployment (vs. our 2015E of $2.88, which includes some share buybacks)." MS data by YCharts
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