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 find that the company's return on equity has been disappointing.

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Highlights from the ratings report include:
  • Powered by its strong earnings growth of 300.00% and other important driving factors, this stock has surged by 25.09% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • 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 303.6% when compared to the same quarter one year prior, rising from -$249.00 million to $507.00 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 swung to a loss, reporting -$0.04 versus $1.15 in the prior year. This year, the market expects an improvement in earnings ($2.10 versus -$0.04).
  • MS, with its decline in revenue, underperformed when compared the industry average of 11.9%. Since the same quarter one year prior, revenues slightly dropped by 6.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • 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 on the basis of return on equity, MORGAN STANLEY underperformed against that of the industry average and is significantly less than that of the S&P 500.

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 $46.65 billion and is part of the financial sector and financial services industry. Shares are up 23.6% year to date as of the close of trading on Thursday.

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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