Mon, Apr. 20, 11:10 AM
- While Evercore ISI's Glenn Schorr calls Morgan Stanley's (MS +1.2%) Q1 results a "Bo Derek" - otherwise known as a "10" - JMP's Devin Ryan is somewhat more measured.
- After stripping out a sizable tax benefit, "core" EPS still beat estimates, but not by nearly as gaudy an amount as the headlines suggest. The outperformance - however - was driven by FICC action, and one wonders how sustainable that is. Wealth Management revenues, on the other hand, were 3% less than what Ryan had modeled.
- "We suspect investors will initially view results favorably, but given the trading-heavy outperformance, we believe the focus will also be on sustainability, which could temper the upside."
- Speaking on the earnings call, Google-bound CFO Ruth Porat - applauding some of the regulatory measures aimed at banks since the crisis - calls for a "time out" to "pause, digest, and assess" what's working and what's not.
- Previously: Morgan Stanley +2% after strong Q1. (April 20)
Mon, Apr. 20, 7:47 AM
- Q1 income from continuing operations (excluding DVA) of $2.3B or $1.14 per share vs. $1.4B and $0.70 one year ago. Company realized a net tax benefit of $564M or $0.29 per share thanks to repatriation of non-U.S. earnings at a lower than expected rate, so the earnings beat was closer to $0.07. Annualized ROE of 10.1%.
- Institutional Securities pre-tax income (excl. DVA) of $1.688B on revenue of $5.333B vs. $1.290B and $4.551B a year ago. FICC revenue of $1.9B vs. $1.7B. Advisory revenue of $471M vs. $336M. Equity sales and trading revenue of $2.3B vs. $1.7B.
- Wealth Management pre-tax income of $855M vs. $686M a year ago on revenue of $3.834B vs. $3.609B. Pre-tax margin of 22%.
- Investment Management pre-tax income of $187M vs. $268M a year ago.
- CET1 ratio of 13.7%. Tangible book value per share of $28.91.
- Firm repurchased about $250M of stock during quarter, or roughly 7M shares.
- Previously: Morgan Stanley beats by $0.36, beats on revenue (April 20)
- MS +2% premarket
Mon, Apr. 20, 7:16 AM
Mon, Apr. 20, 1:57 AM
- Morgan Stanley (NYSE:MS) is in discussions with New York’s top litigator, Eric Schneiderman, to settle an investigation over its shoddy mortgage bonds that lost value during the financial crisis, WSJ reports.
- The $500M deal would likely include some cash as well as consumer relief, although it is unclear whether the bank would need to boost legal reserves to account for a settlement.
- Morgan Stanley may update its legal situation when it reports Q1 earnings this morning.
Sun, Apr. 19, 5:30 PM
Fri, Apr. 17, 2:50 AM
- Goldman Sachs' (NYSE:GS) blockbuster performance in stock trading last quarter has some Wall Street watchers speculating whether it beat rival Morgan Stanley (NYSE:MS) out of the top spot in equities.
- Goldman was head-and-shoulders above Morgan Stanley for many years in stock trading, but recently the latter gained ground: Morgan Stanley's 2014 stock-trading revenue surpassed Goldman's for the first time in at least a decade.
- Analysts have cautioned that while Goldman had a good quarter, broader challenges, such as electronic trading and tighter regulation, still exist. Investors will see whether Morgan Stanley's crown will fall next week.
Wed, Apr. 15, 3:58 AM
- Morgan Stanley (NYSE:MS) has been offered more than $1B for its merchant oil trading business by Castleton Commodities International, a U.S.-based trading house.
- Morgan Stanley previously reached a deal to sell the unit to Rosneft, but the deal expired as it awaited U.S. regulatory approval in December amid tensions over Moscow's intervention in Ukraine.
- Previously: Morgan Stanley looking for another buyer for oil-storage unit (Feb. 02 2015)
Tue, Apr. 14, 3:40 PM
- Fast action at JPMorgan's trading and investment banking businesses helped the bank to consensus-beating Q1 results.
- The Corporate & Investment bank posted revenue of $9.58B in Q1, up 8% from a year ago and up 30% from Q4. Trading revenue of $5.67B gained 9% Y/Y, with a 4.5% rise in bond-trading revenue and a 22% increase in equity-trading revenue. M&A advisory revenue got off to its best start ever, up 42% from a year ago and 25% from Q4.
- Goldman Sachs (GS +1.1%) reports on Thursday and Morgan Stanley (MS +1.4%) on Monday.
- Previously: JPMorgan earnings call: Optimism on FICC (April 14)
- Previously: "Robust" activity in FICC leads strong quarter at JPMorgan (April 14)
Wed, Apr. 1, 6:28 PM
- Morgan Stanley (NYSE:MS) gave James Gorman the biggest raise yet among Wall Street CEOs for last year, hiking his pay 25% to $22.5M.
- Gorman collected an annual salary of $1.5M, a cash and stock bonus of $14.5M and longer-term incentive pay valued at up to $6.5M, capping his most lucrative year in his five running the company.
- The MS compensation committee said Gorman exceeded expectations, with the firm’s performance and shareholder returns “strong, with room for continued progress."
- CFO Ruth Porat, who is leaving this month to take the same role at Google, was awarded $13M, up from $12M a year earlier, while Colm Kelleher, who leads the investment banking and trading division, and Greg Fleming, who oversees wealth and asset management, each got $16M, up from $14.5M for 2013.
Wed, Apr. 1, 11:41 AM
- Noting both Goldman Sachs (GS +0.9%) and Morgan Stanley (MS +0.6%) have underperformed the broader markets YTD, JMP's Devin Ryan expects gains going forward, but not enough to make him a buyer yet.
- For Q1, Ryan says Goldman looks set to report the better quarter relative to expectations, but both should have good enough results to support current valuations. However, at about 1.2x tangible book value, Ryan isn't seeing a lot of room for multiple expansion.
- "We continue to look for either more dislocated valuations or signs of earnings expansion above our current expectations, to potentially become more constructive on shares at the large cap investment banks."
- Source: Barron's
Mon, Mar. 30, 11:35 AM
- Morgan Stanley (MS +1.8%) launched the compressed natural gas business - Wentworth - last year, but it quickly drew the not-so-admiring attention of the Fed, and crude oil prices have collapsed since, meaning natural gas is not so cheap of an alternative to black gold as it was last summer.
- The business will be transferred to a newly-formed company called Pentagon Energy, with two bank managers involved with Wentworth exiting Morgan Stanley to run the company.
- Source: Reuters
Fri, Mar. 27, 6:57 AM
- At the prompting of at least one BNY Mellon (NYSE:BK) director, recruiting firm Spencer Stuart firm has come up with a list of potential candidates to replace embattled CEO Gerald Hassell.
- Gregory Fleming, who runs wealth and investment management at Morgan Stanley (NYSE:MS), has been contacted about the position, Reuters reports.
- Other potential candidates include Mary Erdoes, who runs JPMorgan's (NYSE:JPM) asset management business and Michael Cavanagh, a former JPMorgan executive who is now COO at P-E firm Carlyle (NASDAQ:CG).
- Previously: Marcato demands new leadership at BNY Mellon (Mar. 10 2015)
Fri, Mar. 27, 2:36 AM
- Ruth Porat, who said earlier this week she would leave her job as Morgan Stanley's (NYSE:MS) finance chief to take the same role at Google (GOOG, GOOGL), will be paid more than $70M in the next two years through a combination of restricted stock units and a biennial grant.
- She will also make more than most Wall Street CEOs, including her old boss, Morgan Stanley chief executive James Gorman, who was paid $18M in 2013.
- Google's outgoing CFO Patrick Pichette was paid $62.2M for the three years through 2013.
- Previously: Google hires new CFO from Morgan Stanley (Mar. 24 2015)
Thu, Mar. 26, 4:37 PM
- The big banks have had a rough start to the year, but surging trading volume in bonds, currencies, and commodities in Q1 could make for pleasant surprises when the lenders report quarterly results next month, writes John Carney.
- The average daily trading volume across all U.S. bonds was up 10.6% Y/Y through the end of February, according to Sifma, with trading in corporate bonds up 18.1%, driven by a big rise in issuance. Trading in Fannie, Freddie, and Ginnie MBS was up 35.3% from a year ago.
- Goldman Sachs (NYSE:GS) could be a particular beneficiary, as about 25% of its revenue is generated by FICC, and Credit Suisse sees the bank posting its first year-over-year increase in that unit's revenue since 2009.
- Others of interest: Morgan Stanley (NYSE:MS), Bank of America (NYSE:BAC), Citigroup (NYSE:C), and JPMorgan (NYSE:JPM).
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Thu, Mar. 26, 11:00 AM
- Decoupling of global monetary policy continues to drive dispersion in markets and opportunities for trading businesses to monetize client flows," say Credit Suisse's Christian Bolu and Susan Katzke, expecting healthy Q1 results from the brokerage industry.
- They also note the "digestion" of sizable M&A backlogs will provide a boost to earnings.
- The team boosts its Q1 EPS estimate for Goldman Sachs (GS -0.3%) to $4.30 from $4.16, and see Q1 year-over-year FICC growth for the first time since 2009. ROE should be an industry-leading 11%. They'll also be looking for management earnings call commentary surrounding capital plans. The target price of $225 is 1.3x book value and 12x 2016 estimated earnings.
- Morgan Stanley (MS -0.2%), however, rates just a Neutral as core trading revenues will be lower Y/Y thanks to elevated commodities revenue a year ago.
Thu, Mar. 26, 7:41 AM
- The moves are key to the next phase of Morgan Stanley (NYSE:MS) CEO James Gorman's turnaround plan, as well as to build a bench for the next generation of leadership.
- The bank this week promoted 46 year-old investment banker Jonathan Pruzan to CFO to replace the departing Ruth Porat.
- Were Gorman to exit sooner rather than later, the short list of successors would include the head of wealth management Greg Fleming and the head of investment banking Colm Kelleher, but the list is far longer if Gorman moves along further down the road (which appears to be his intention at the moment).
- Less noticed than the Porat departure was last week's reshuffle of securities and wealth management leadership - the intention of which was to "cross-pollinate" key management.
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