NEW YORK (TheStreet) -- Morgan Stanley (MS) shares closed intraday trading down 2.99% to $36.28, after analysts at Buckingham Research lowered its rating on the financial services company to "neutral" from "buy."
The firm also set the company's price target at $38, representing a potential 4.7% upside from the stock's closing price today.
Morgan Stanley's stock has outperformed the S&P 500 Index over the past 52 weeks, gaining 20.30% over that time period while the S&P has risen 14.65%.
Separately, the company was fined $4 million by the Securities and Exchange Commission for violating market access rules and failing to enforce restrictions that would have prevented the unauthorized purchase of Apple (AAPL) shares by one of the bank's customer trading firms.
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 find that the company's profit margins have been poor overall."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- MS's revenue growth has slightly outpaced the industry average of 0.8%. Since the same quarter one year prior, revenues slightly increased by 4.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- 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 gross profit margin for MORGAN STANLEY is currently lower than what is desirable, coming in at 29.42%. Regardless of MS's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 17.83% trails the industry average.
- You can view the full analysis from the report here: MS Ratings Report