Morgan Stanley (MS) Stock Declines Today After Rosneft Deal Falls Through

NEW YORK (TheStreet) -- Morgan Stanley (MS) shares are down 0.25% to $38.41 in trading on Monday after the financial services provider's deal to sell its oil trading and storage business to Russian company OAO Rosneft  (RNFTF) fell through.

The deal was nixed due to the diplomatic fallout from Russia's continued occupation of Ukraine's Crimean peninsula. The two sides announced the sale back in December 2013 for an undisclosed amount and they were expected to close the deal in the latter half of this year.

Morgan Stanley has said that it will continue to try to sell the business.

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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 1.2%. 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.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. 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
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