Morgan Stanley - Strong 2014 And Still A Reasonable Valuation
- Morgan Stanley's shift towards wealth management has reduced the risk profile and should ultimately lead to a higher valuation than many of its peers.
- The key transaction that changed the game for MS, was the Smith Barney acquisition from Citigroup.
- Morgan Stanley boasts a stellar balance sheet, and it is my expectation that the company should be increasingly able to buy back stock and enhance the dividend.
Morgan Stanley's Earnings Performance For 2014: On The Right Track?
- Morgan Stanley earned an 8.9 percent return on equity in 2014 doubling the performance of the previous year.
- Morgan Stanley, of the six largest bank holding companies, seems to be ahead of the others in transforming itself to be able to perform in the "new" economy.
- The changes that it has made is aimed at producing larger and more consistent returns.
Whisper Number Impact: What Will Morgan Stanley's Shares Do Post Earnings?WhisperNumber • Tue, Jan. 20
- The whisper number is $0.61, thirteen cents ahead of the analysts' estimate.
- Morgan Stanley has a 74% positive surprise history (having topped the whisper in 14 of the 19 earnings reports for which we have data).
- The overall average post earnings price move is 'negative' (beat the whisper number and see weakness, miss and see weakness) when the company reports earnings.
Can Morgan Stanley Continue Its Exceptional Performance?
- 2014 was a good year for Morgan Stanley.
- Sources close to the bank indicate that Morgan Stanley is planning to enter the Indian property market in 2015.
- Net income applicable to Morgan Stanley for the nine month period rose by an astounding 80% to $5.117 billion from $2.848 billion.
- The stock currently trades at $36.95 per share, trading near the 52-week high of $39.19 per share. This upward trajectory is likely to continue.
Morgan Stanley Seems To Be Pushing Forward Despite Aborting Sale Of Oil Unit To Rosneft
- The deal between Morgan Stanley and Rosneft met its dead end as US regulators failed to approve the deal over concerns regarding the Ukraine crisis.
- Sources close to the bank indicate that it is likely to actively participate in the Indian property market in 2015, as it cuts back on low yielding investments.
- Morgan Stanley was able to secure the $4.7 billion placement deal of Chinese company Peng An, leaving rivals behind and taking the top position in the Asian league tables.
- The company was able to report earnings of $0.77 per share in Q3 as revenues also grew by a staggering 54% and were reported at $8.7 billion.
- Stocks for the company seem attractive as they have gained nearly 22% in value year to date. Q4 results seem positive as of now.
Why Morgan Stanley Is The Best Stock In Its Industry Group
- The Capital Markets industry group has benefited from various industry tailwinds, such as the rising equity markets and the huge level of M&A activity.
- Morgan Stanley comes out as our industry group leader, combining an attractive valuation with price momentum and strong growth.
- We maintain a $48.73 price target on Morgan Stanley, representing a 27% premium on its current price.
Morgan Stanley - After A Solid Quarter, Only Buy On Dips
- Morgan Stanley posted excellent third quarter earnings last week.
- Both the investment banking and wealth management business performed very strong.
- Shares trade at a fair valuation, but note that current operating conditions are very favorable already.
- Unlike many other banks which suffer from lower interest rates, Morgan Stanley might actually benefit from them.
- Given the favorable point in the economic cycle and long term risks to the business model, I only buy on dips.
- MS beat consensus on the top and bottom lines.
- The strong earnings confirms our bullish thesis that MS is a value and growth play.
- We felt the bank was strongly positioned to top Q3 earnings and note there's more to come.
Morgan Stanley: Good Results Driven By Market StrengthDiesel • Oct. 20, 2014
- Morgan Stanley posted a profit increase of 89% compared to last year.
- The results were mostly driven by the strength of the equity market.
- In the short term, market weakness might hurt these results but the long-term story is intact.
- The company's valuation is attractive at 10 times earnings and 1 time book value.
- Morgan Stanley is scheduled to report Q3 2014 earnings before the opening bell on Friday, October 17th.
- Earnings Per Share Excluding Items: The current Street estimate is $0.54 (range $0.48 to $0.58).
- Revenues: The current Street estimate is for an increase of 0.8% y/y to $8.17 bln (range $7.74 bln to $8.51 bln).
Goldman Sachs Vs. Morgan Stanley: Which Is The Better Investment?
- Morgan Stanley has better EPS and revenue growth than Goldman.
- Goldman Sachs trades at a cheaper forward multiple than Morgan Stanley.
- Both are poised to benefit from continued strength in M&A activity and IPO demand.
Morgan Stanley: A Top Brokerage Getting Back Into Commodities
- While this is one of the top brokerages in the U.S. it’s now looking to get into the CNG business.
- It’s looking to use its Grandfather status to build and operate a nat gas facility.
- And why not? It’s in the business of building shareholder value and this looks to be an ideal time for nat gas investments.
Despite SureInvestment Debacle, Morgan Stanley Shines In 2014
- MS was charged with failing to scrutinize the operations of one of their accounts, SureInvestments, which was found to be involved in a U.K. Ponzi scheme.
- The fine was relatively small ($280,000), relative to the billions shelled out by peer institutions for dishonest practices.
- Relative to peers BAC and C, MS is looking strong; MS earnings results were positive; MS has beaten earnings estimates for the past seven quarters, consistently.
- We are optimistic that MS could be a strong selection moving forward, despite the SureInvestment embarrassment.
Adding Risk By Closing Morgan Stanley And Putting Profits To Work In Under Armour
- Morgan Stanley is a high growth financial company which pays a dividend, but I closed my position because I had a great profit in a short amount of time.
- Under Armour is a consumer goods stock which should thrive if the US consumer is on the rebound and as people try to get in better shape.
- By adding Under Armour to the growth portfolio I'm adding a bit more risk as the company doesn't pay a dividend.
Morgan Stanley: Real Value Hemmed In By Litigation Issues
- While the players of the industry witnessed a decline of 1% in their revenues in equity sales and trading, the company was able to register a CAGR of 7%.
- RWAs were down to $192 billion in the most recent quarter, mainly driven by decreased exposure to securitization and credit spread products.
- The wealth management segment continues to expand its revenue base on the back of increased scale and substantial asset growth, mainly achieved through successful integration with Citigroup's wealth management business.
- The wrongdoings of the institution have come back to haunt its bottom line once again in this quarter.
- The stock price is currently depressed due to the litigation hype.
Morgan Stanley Is At A Strong Support Level Right Now
- I sold out of Concho Resources because I had a quick gain in the stock and I was too "oily" in my growth portfolio.
- Morgan Stanley is a growth stock in the financial sector which also pays a dividend and is a value play.
- I believe Morgan Stanley has a strong floor of support at $33.
Morgan Stanley Jumps On Earnings, Building Foundation For Lasting Growth
- Q2 results for MS far exceeded the results of its main rivals BAC, JPM, and C; as well as Wall Street’s overall expectations.
- This stellar accomplishment is due mainly to the investment banking divisions and strength in its wealth management.
- MS has rare Wall Street management and is so far pretty clean from the huge scandals that have dragged down its peers over the past several years.
- We remain very positive on MS—viewing these earnings as a small boost on an overall, consistent climb in 2014.
Morgan Stanley - Gorman's Strategy Creates Stability And Value, And Is Already Paying OffThe Value Investor • Jul. 21, 2014
- Morgan Stanley posted strong second quarter results, even adjusting for DVA and tax benefits.
- CEO Gorman's strategy to focus on wealth and investment management creates visibility and high earnings.
- The freed up capital from exiting capital-intensive businesses is already being returned to investors, creating further appeal.
Oct. 9, 2014, 10:04 AM
- Morgan Stanley (MS -1.3%) is the only bank to have advised on each of 2014's largest acquisition deals, including serving as the sole banker to WhatsApp in its $18B sale to Facebook, according to Bloomberg. Morgan also had a piece of the Alibaba IPO and has jumped to 4th place from 7th in junk bond underwriting.
- JPMorgan (JPM -0.4%) and CItigroup (C -0.6%), on the other hand, face the fastest-shrinking bonus pools, with The Bank of Dimon notable for having the steepest drop in fixed-income trading revenue among the five largest Wall Street banks.
- JPMorgan, Citigroup, and Wells Fargo are set to release Q3 results next Tuesday, with Bank of America, Goldman Sachs, and Morgan Stanley following shortly thereafter.
Oct. 7, 2014, 7:39 AM
- Ahead of Q3 earnings results set for release this month, Wells Fargo lifts its price targets on those banks with sizable capital markets businesses, citing strong investment banking action and trading activity that's stopped falling.
- Outperform-rated Ciitgroup (NYSE:C) and JPMorgan (NYSE:JPM) have their price targets lifted to $60 from $57, and $68 from $66, respectively.
- Market Perform-rated Bank of America (NYSE:BAC), Goldman Sachs (NYSE:GS), and Morgan Stanley (NYSE:MS) have their targets lifted to $19 from $17, $195 from $185, and $37 from $35, respectively.
Sep. 25, 2014, 7:11 AM
- Sanctions could make financing day-to-day operations a near-impossibility, according to sources close to Rosneft (OTC:RNFTF), reports Reuters. The chances of a deal going through, they say, range from "possible" to "highly unlikely."
- The business up for sale trades actual barrels of crude oil, not just futures contracts, putting Morgan Stanley (NYSE:MS) under regulatory pressure to exit an operation where something like an oil tanker leak could expose it to billions in liability.
- Rosneft late last year agreed to pay between $300M-$400M in cash for the unit, but the actual operation of the business requires billions in bank lines of credit - something which could prove difficult to secure given Western sanctions.
- "This deal just cannot go through," says one of Reuters' sources. "It is not an issue of finding $300M to buy the business. Rosneft has the money. But it won't be able to operate it."
Sep. 24, 2014, 8:30 AM| Comment!
Sep. 17, 2014, 3:16 PM
- Leading markets higher as the reality of higher interest rates gets nearer is the financial sector (XLF +0.9%). Whether its banks, brokerages, or insurers, a higher benchmark rate for some time has been considered a key bullish catalyst. An especially large move is being seen in the online brokerage names who have been forced to forego money market fees for years thanks to ZIRP: E*Trade (ETFC +3%), Schwab(SCHW +3.2%), Ameritrade (AMTD +2%).
- Morgan Stanley (MS +1.8%), Bank of America (BAC +1.2%), JPMorgan (JPM +0.9%)
- U.S. Bancorp (USB +1.1%), Regions Financial (RF +2%), New York Community Bank (NYCB +0.8%), Huntington Bancshares (HBAN +1.3%), KeyCorp (KEY +1.3%)
- MetLife (MET +0.6%), Voya Financial (VOYA +0.7%).
- Chubb(CB +0.4%), AIG (AIG +1.1%), Hartford (HIG +0.8%)
- Financial sector ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, KIE, IAT, SEF, IYG, IAK, FXO, KBWB, FNCL, RKH, QABA, FINU, KRU, KBWR, RWW, KBWP, RYF, KBWI, KRS, FINZ
Sep. 16, 2014, 8:22 AM
- Magnum Hunter Resources (NYSE:MHR) says it is bringing in Morgan Stanley as a partner in its Eureka Hunter natural gas gathering subsidiary in the Marcellus and Utica shale fields, giving the two co-ownership in the business valued at $1B.
- Morgan Stanley Infrastructure (NYSE:MS) agrees to pay $65M to MHR for a 6.5% stake and will buy ArcLight Capital Partners' 41% stake in the business for an unspecified amount.
Sep. 16, 2014, 7:20 AM
- Morgan Stanley's (NYSE:MS) chairman of China investment banking Alex To plans to exit soon to run Bank of America's (NYSE:BAC) investment bank in that country. To joined Morgan in 2006 and played a key role in Shuanghai's purchase of Smithfield foods last year. His bank currently ranks sixth in investment banking revenue in Asia ex-Japan, according to Dealogic. BofA ranks ninth.
- The move is the latest in a series of management moves in China investment banking - in July JPMorgan grabbed UBS's top guy, and last month Morgan Stanley lured over a Deutsche Bank executive.
Sep. 9, 2014, 12:24 PM
- The Fed intends to impose a capital surcharge on banks tougher than the international standard, according to Fed Governor Daniel Tarullo's prepared remarks for the Senate Banking Committee. Those banks with heavier reliance on short-term funding like overnight loans - i.e. Goldman Sachs (GS -1%) and Morgan Stanley (MS -1.8%) - will likely face even more rigorous requirements.
- Officials haven't yet decided on a number, but reportedly are considering as much as 200 basis points more than the top range of 2.5% of risk-weighted assets agreed to by international regulators.
- What's not yet clear is who would need to raise capital to meet the new, tougher standard.
- Citigroup (C -1%), Bank of America (BAC -0.6%), JPMorgan (JPM -1.3%), Wells Fargo (WFC -0.4%), State Street (STT -1.1%), Bank of New York Mellon (BK -0.9%)
- ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, IAI, SEF, IYG, FXO, FNCL, FINU, KCE, RWW, RYF, KBWC, FINZ
Sep. 5, 2014, 9:46 AM
Sep. 5, 2014, 3:41 AM
- U.S. Federal Judge Denise Cote has ruled that investors may press claims against 12 major banks for violating antitrust law by limiting competition and fixing prices in the $21T CDS market, even though improved liquidity should have driven costs down.
- The defendants include BofA (NYSE:BAC), Barclays (NYSE:BCS), BNP Paribas (OTC:BNPZY), Citigroup (NYSE:C), Credit Suisse (NYSE:CS), Deutsche Bank (NYSE:DB), Goldman Sachs (NYSE:GS), HSBC (NYSE:HSBC), JPMorgan (NYSE:JPM), Morgan Stanley (NYSE:MS), RBS (NYSE:RBS) and UBS (NYSE:UBS).
Sep. 4, 2014, 7:14 AM| Comment!
Sep. 4, 2014, 3:18 AM
- U.S. regulators have approved of the proposed liquidity rules to safeguard banks in case of a financial crunch.
- The rules are requiring large U.S. banks to load up on ultra-safe assets to ensure enough cash and securities to fund their operations for 30 days. Separate liquidity rules for foreign banks will be drawn up at a later date.
- Big banks will need to hold a total of about $2.5T in easy-to-sell assets by 2017, which would result in a $100B shortfall if the threshold applied today.
- Related tickers: JPM, C, BAC, WFC, GS, MS, BK, STT, ZION
- Previously: Bank regulators to vote on new liquidity rules
Sep. 3, 2014, 2:39 AM
- Bank regulators are expected to finalize rules today that would require banks to hold capital against every asset on their books, and approve of a "liquidity-coverage ratio", which would require large banks to load up on ultra-safe assets to fund their operations for 30 days.
- The new rules have Wall Street concerned due to the likely harm to earnings and lending restrictions, although regulators say the policies will create a safer financial system.
- Related tickers: JPM, C, BAC, WFC, GS, MS, BK, STT, ZION
Aug. 29, 2014, 3:00 AM
- Morgan Stanley (NYSE:MS) is filing plans to build, own and operate one of the first U.S. compressed natural gas export facilities and submitted its application to the Department of Energy in May.
- The move is the first sign that the bank is returning to the physical commodity markets even as it sells its global oil business.
- Morgan Stanley, along with Goldman, are the only two Wall Street banks that are allowed to own and operate infrastructure of raw materials due to their "grandfather" status for any commodities activities they engaged in before 1997.
Aug. 27, 2014, 6:58 AM| Comment!
Aug. 25, 2014, 11:49 AM
- Following major-league mortgage-related settlements with JPMorgan, Citigroup, and Bank of America, the DOJ has turned its attention to Goldman Sachs (GS +2.2%) and Morgan Stanley (MS +3.2%), and both are in early discussions, reports the FT. Evidence is still being gathered, say the FT's sources, and negotiations over a deal are still a ways off.
- Neither Morgan nor Goldman were as big of players in mortgages as the other banks, so the terms and numbers are likely to be somewhat eased from the headline-grabbing ones of JPMorgan, Citi, and BofA.
- Previously: Goldman settles with FHFA, will buy back RMBS for $3.15B
MS vs. ETF Alternatives
Morgan Stanley is a financial services firm that, through its subsidiaries and affiliates, provides its products and services to a diversified group of clients and customers, including corporations, governments, financial institutions and individuals.
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