NEW YORK (TheStreet) -- Morgan Stanley (MS) shares are down 0.75% to $37.17 in afternoon trading on Wednesday and the financial services provider is the subject of today's 'Chart of the Day' analysis.
Trifecta Stocks' Bryan Ashenberg and Bob Lang believe that as the banking sector moves higher in unison as economic conditions strengthen, the trends point to either "higher inflation or perhaps stronger growth ahead, or a combination."
This is a key profit driver to the bottom line that has been missing since the Fed instituted their zero interest rate policy (ZIRP) some years ago.
Some of the recent earnings released by banks showed some encouraging signs, and long term rates, the ten and 30- year yields, have been creeping higher...
The charts of course tell the story of money flows, and regardless of the fundamental arguments, if the big money is coming into these names, then there is certainly something of substance happening.
The recent run higher post earnings in mid-April has been impressive, with solid Relative Strength and improving technical patterns. The gap just above $38.5 (arrow) begs to be filled, while the late 2014 high is a good first target.
- Bryan Ashenberg and Bob Lang, "Chart of the Week: MS," originally published 5/6/15 on TrifectaStocks.com
Separately, TheStreet Ratings team rates MORGAN STANLEY as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate MORGAN STANLEY (MS) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and attractive valuation levels. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- MS's revenue growth has slightly outpaced the industry average of 4.4%. Since the same quarter one year prior, revenues slightly increased by 8.1%. 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. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- MORGAN STANLEY reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, MORGAN STANLEY increased its bottom line by earning $1.58 versus $1.38 in the prior year. This year, the market expects an improvement in earnings ($2.95 versus $1.58).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 59.1% when compared to the same quarter one year prior, rising from $1,505.00 million to $2,394.00 million.
- You can view the full analysis from the report here: MS Ratings Report