Morgan Stanley's Hold Recommendation Affirmed

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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, revenue growth and notable return on equity. However, as a counter to these strengths, we find that the growth in the company's net income has been quite unimpressive.

Highlights from the ratings report include:
  • Compared to its closing price of one year ago, MS's share price has jumped by 26.57%, exceeding the performance of the broader market during that same time frame.
  • The revenue growth came in higher than the industry average of 17.1%. Since the same quarter one year prior, revenues slightly increased by 5.3%. 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 experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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 increased its bottom line by earning $1.43 versus $0.00 in the prior year. This year, the market expects an improvement in earnings ($2.53 versus $1.43).
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Capital Markets industry and the overall market, MORGAN STANLEY's return on equity is below that of both the industry average and the S&P 500.
  • 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 69.5% when compared to the same quarter one year ago, falling from $594.00 million to $181.00 million.

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 $57.9 billion and is part of the financial sector and financial services industry. Shares are down 5.3% year to date as of the close of trading on Friday.

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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