Update (9:40 a.m.): Updated with Wednesday market open information.
NEW YORK (TheStreet) -- UBS reduced its target price on Morgan Stanley (MS) to $38, reduced its estimates and set a "buy" rating. The firm said the decision was driven by rate hike timing and weaker first-quarter capital markets.
The stock was flat at $29.73 shortly after the market opened on Wednesday.
Separately, TheStreet Ratings team rates MORGAN STANLEY as a "hold" with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate MORGAN STANLEY (MS) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance 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 analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 16.9%. 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.
- MS's share price has surged by 25.23% over the past year, reflecting the market's general trend, despite their weak earnings growth during the last quarter.
- 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 ($2.52 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.
- You can view the full analysis from the report here: MS Ratings Report