Earnings Preview: Morgan Stanley

| About: Morgan Stanley (MS)

Morgan Stanley (NYSE:MS) is slated to report Q4 results on Thursday, January 19 before the market open, with a conference call scheduled for 10:00 am ET.


Analysts are looking for EPS of (57c) on revenue of $5.55B. The consensus range is (81c)-(31c) for EPS, and $4.37B-$9.48B for revenue, according to First Call. Morgan Stanley investors may be more upbeat about the investment bank's outlook after its competitor, Goldman Sachs (NYSE:GS), reported higher than expected Q4 EPS. However, Goldman's revenue came in lower than expected, and some on the Street are asking whether investment banks like Goldman and Morgan Stanley are somewhat obsolete, given new trading limits being implemented by the government. Furthermore, JP Morgan (NYSE:JPM) and Citigroup (NYSE:C) reported that their trading and investment banking revenues fell significantly in Q4. On a positive note, Goldman did say that its outlook is improving this year, as markets and economies rebound. In a possible negative sign for Morgan Stanley's outlook, the investment bank reportedly plans to reduce about 1,600 jobs globally in Q1, DealBreaker said last December 15.

Analyst Views

On January 6, Wells Fargo lowered its Q4 EPS estimate for Morgan Stanley to (70c) from 18c. The firm said its reduction reflected Morgan Stanley's settlement with MBIA (NYSE:MBI), as well as a more conservative outlook on Morgan Stanley's fixed income and equity trading results in December. The firm maintained a Market Perform rating on Morgan Stanley.