NEW YORK (TheStreet) -- Morgan Stanley (MS) shares were downgraded to "neutral" from "outperform" by analysts at Macquarie (MIC) on Friday, who removed the financial institution from its "marquee" stock list.
The firm made a valuation call on the company's current stock price, concluding that the stock has reached peak value and is unlikely to achieve a higher upside in the short term.
Morgan Stanley shares closed trading up 0.4% to $34.70 on Thursday and remain flat in pre-market trading today.
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 impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- MS's revenue growth has slightly outpaced the industry average of 3.0%. Since the same quarter one year prior, revenues slightly increased by 0.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 113.95% and other important driving factors, this stock has surged by 33.15% over the past year, outperforming the rise in the S&P 500 Index during the same period. Although MS had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
- The gross profit margin for MORGAN STANLEY is currently lower than what is desirable, coming in at 33.06%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 19.79% is above that of the industry average.
- Net operating cash flow has significantly decreased to $548.00 million or 96.02% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, MORGAN STANLEY has marginally lower results.
- You can view the full analysis from the report here: MS Ratings Report
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