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Morgan Stanley Seems To Be Pushing Forward Despite Aborting Sale Of Oil Unit To RosneftStock Gazer • Today, 1:54 AM
- 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 • Mon, Oct. 20
- 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.
- 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 • Mon, Jul. 21
- 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.
- Morgan Stanley saw client assets soar to over $2T in Q2 2014.
- Profit in wealth management reached 21% of net revenue in Q2 2014.
- CEO James Gorman plans to grow this profit to 22% to 25% by the end of 2015.
- Read further for Gorman's 5 main points on MS's future growth. The plans and strategy seem sound.
- Morgan Stanley is scheduled to report 2Q 2014 earnings before the opening bell on Thursday, July 17th.
- Earnings Per Share, Excluding Items: If provided, the value for this measure is most often the comparable figure to consensus estimates. The current Street estimate is $0.56.
- Revenues: The current Street estimate is a decrease of 1.3% y/y to $8.22 bln (range $7.58 bln to $8.65 bln).
Goldman/Morgan Earnings Previews: Is The Goldman/Morgan Banking Model A Fading Relic?
- Dodd-Frank and the regulators seem to be targeting volatility.
- In terms of the financial system, there is a higher premium being put on stability and certainty.
- Choose asset gatherers which have more consistent and dependable earnings results.
Morgan Stanley Bonds: Default Risk Improves But Bond Value Slips
- Morgan Stanley default probabilities have dropped by 0.01% to 0.03% since April 25, and peer group rankings have improved.
- Bond value, as measured by the credit spread to default probability ratio, has slipped from slightly above average to slightly below average.
- We believe that a majority of sophisticated analysts would still rank the firm as "investment grade." The default-adjusted dividend yield is 0.18% below the traditional dividend yield.
- Morgan Stanley is undergoing a positive change in fixed income, money management, investment banking, and other sectors.
- Shifts come at a time when peers are truly flailing.
- We recommend Morgan Stanley as a Buy in 2014, compared with the overall industry.
Tue, Dec. 9, 8:52 AM
- A check of the other major banks premarket amid a global selloff of some note and BofA's Brian Moynihan's warning about sluggish Q4 trading revenue finds JPMorgan (NYSE:JPM) -1.5%, Citigroup (NYSE:C) -1.5%, Wells Fargo (NYSE:WFC) -1.2%, Goldman Sachs (NYSE:GS) -1.7%, and Morgan Stanley (NYSE:MS) -1.5%.
- XLF -1.1%
- ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, IAI, SEF, IYG, FXO, FNCL, FINU, KCE, RWW, RYF, KBWC, FINZ
Fri, Oct. 17, 3:03 PM
- "We view this as a great quarter, which demonstrates good progress on both production and efficiency. We continue to like Morgan Stanley (MS +1.8%) and its peers, and believe the recent pullback represents an attractive buying opportunity. We expect a good Q4 follow-through, and believe CCAR capital returns will be increased in the next couple of cycles as excess capital builds," says MKM's David Trone.
- "The beat was entirely driven by the top-line which came in $0.15 higher due to better than expected investment banking, FICC, and equities," says Citi's Keith Horowitz and Chris Larmoyeux. The beat despite the high bar for capital markets names, he says, bodes well for the stock, particularly given the recent sizable selloff.
- Previously: Morgan Stanley higher after earnings beat
Fri, Oct. 17, 7:30 AM
- Q3 income from continuing operations (excluding DVA) of $1.6B of $0.77 per share vs. $1B and $0.50 one year ago. This year's Q boosted by net discrete tax benefit of $237M or $0.12 per share.
- Institutional Securities pre-tax income from continuing operations of $1.2B vs. $396M a year ago. Advisory revenue of $392M vs. $275M thanks to boosted M&A activity. Equity underwriting revenue of $464M vs. $236M thanks to boosted IPO activity. FICC net revenue of $997M vs. $835M (about inline with what a few other banks posted). Compensation expense of $1.8B vs. $1.6B.
- Wealth Management pre-tax income of $836M vs. $668M a year ago, on net revenue of $3.8B vs. $3.5B. Asset management fees of $2.2B vs. $1.9B. Net interest income of $601M vs. $493M thanks to higher deposits and loan balances. Compensation expense of $2.2B vs. $2B. Wealth managers of 16,162 fell from 16,517, with average annualized revenue per advisor of $932K up 10%.
- Investment Management pre-tax income of $188M vs. $300M a year ago.
- Tangible book value per share of $29.25. Roughly $195M of stock repurchased during Q, or 5.9M shares.
- MS +2.8% premarket
- Previously: Morgan Stanley beats by $0.23, beats on revenue
Wed, Sep. 17, 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
Tue, Sep. 9, 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
Fri, Sep. 5, 9:46 AM
Thu, Jul. 17, 7:33 AM
- Excluding DVA, income of $1.9B or $0.91 per share vs. $900M and $0.37 one year ago. The quarter also included a discrete tax benefit of $609M - excluding that brings income down to roughly $1.3B and $0.60 per share, so the "beat" is closer to a nickel.
- Institutional Securities pre-tax income of $927M vs. $806M one year ago on roughly flat revenue of $4.16B (excl. DVA). FICC revenue of $1B slips from $1.2B, partially offset by higher advisory revenue. Equity sales and trading revenue of $1.8B was about flat. Compensation expense slipped by $100M to $1.7B.
- Wealth Management pre-tax income of $767M rises from $655M a year ago on revenue of $3.715B up from $3.531B. Pre-tax margin rises above 20%, coming in at 21%.
- Investment Management pre-tax income of $205M up from $160M a year ago on revenue of $692M up from $673M. AUM of $396B up from $347B thanks to market appreciation and positive flows.
- About $284M or 9.3M shares of stock repurchased during quarter. Morgan has approval from the Fed for $1B in buybacks through the end of 2015 Q1.
- MS +2.2% premarket
- Previously: Morgan Stanley beats by $0.35, beats on revenue
Mon, May. 5, 10:20 AM
- A check of the global banks finds the group pacing market declines in morning action after Friday night's warning on Q2 trading revenue from JPMorgan (JPM -2.2%).
- Nomura's Steven Chubak is first out with lower JPMorgan earnings estimates.
- Jim Cramer sums up sentiment: "This has been a house of pain. You can't own these right now. You just can't."
- Morgan Stanley (MS -1.9%), Goldman Sachs (GS -1.5%), Citigroup (C -1.2%), and Bank of America (BAC -1%), Deutsche Bank (DB -1.2%). Far less trading dependent than the other Too Big Too Fails is Wells Fargo (WFC -0.2%).
- The iShares DJ U.S. Broker-Dealer ETF (IAI -1.2%)
- XLF -0.7%, KBE -0.8%
- ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, IAI, SEF, IYG, PFI, FXO, FNCL, KBWB, FINU, KCE, RWW, RYF, PSCF, FINZ, KBWC
Thu, Apr. 17, 12:15 PM
- On the surface, Morgan Stanley's (MS +3.5%) Q1 results appear far better than those of Goldman Sachs (GS +0.6%), with FICC revenues up 9% Y/Y vs. a decline at Goldman. But Oppenheimer's Chris Kotowski notes Morgan had an especially easy comparison since 2013 Q1 was particularly weak. "Nonetheless, it is always nice to see year-over-year growth, and Morgan Stanley's is the best we have seen so far."
- Kotwoski also takes note of return on tangible common equity - 11.1% at Goldman vs. 10.9% at Morgan. Despite the lower ROE, Morgan trades for 10.3x 2015 estimates vs. 9.4x for Goldman. Investors may want to have to take a harder look at which one to buy.
Thu, Apr. 17, 9:20 AM
- On the surprising strength in FICC revenues in Q1, Morgan Stanley (MS) CFO Ruth Porat - speaking on the earnings call - says weather-related volatility played a big factor in strong commodity business, but credit corporates and mortgages continued to be strong areas for the bank.
- On HFT: “We’ve advocated for increased transparency and trading protocol ... So we welcome ongoing enhancement (in) equity market structure."
- Asked by Mike Mayo to break out the numbers in prime brokerage, Porat declines, saying it's not company policy to break out components within units. "Client balances and revenues are up quarter over quarter and year over year ... (the) highest balances since the crisis."
- Live blog of call
- Shares +2.5% premarket
Thu, Apr. 17, 7:09 AM
- Morgan Stanley (MS) was firing in Q1, with revenue (excl. DVA adjustment) of $8.8B up from $8.5B a year ago, and income from continuing operations of $1.4B or $0.68 per share comparing to $1.2B or $0.60 per share a year ago.
- Wealth Management pre-tax income of $691M on revenue of $3.62B compares to $597M on revenue of $3.47B in last year's Q1. Pre-tax margin of 19%.
- Even FICC is cranking, with revenue of $1.7B up from $1.5B a year ago. This compares to declines at Citi and JPMorgan (though BofA showed an increase). We'll see later this morning what Goldman reports. Prior to earnings season, both Goldman and Morgan were thought to be especially vulnerable to a slowdown in trading revenue.
- Tier 1 Common Equity Tier 1 capital ratio of 14.1%. Tangible book value per share of $27.41.
- Q1 results, press release
- Shares +4.4% premarket
Thu, Mar. 20, 10:54 AM
- Much of the financial sector is lit up bright green, continuing to outperform following yesterday's suggestion by the FOMC and Janet Yellen that rate hikes could come sooner than expected. XLF +1.1%, KBE +1.6%, KRE +1.6%.
- At new 52-week or even multi-year highs are JPMorgan (JPM +2.3%), Wells Fargo (WFC +1.7%), Morgan Stanley (MS +1.4%), and Bank of America (BAC +1.6%).
- Regional lenders: U.S. Bancorp (USB +1%), Huntington (HBAN +1.5%), PNC (PNC +1.3%), BB&T (BBT +1.5%), Fifth Third (FITB +1.8%), First Niagara (FNFG +2.1%).
- Leading among the life insurers are Lincoln National (LNC +1.9%), Protective Life (PL +1.6%), Manulife (MFC +1.2%), and Sun Life (SLF +1.1%).
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, KIE, IAT, SEF, IYG, IAK, FXO, PFI, KBWB, RKH, QABA, FNCL, FINU, KRU, RWW, KBWR, RYF, PSCF, KBWI, KBWP, KRS, FINZ
Wed, Mar. 5, 3:42 PM
- Buying the rumor? On a flattish day for the major averages, the Too Big To Fail banks are ignoring a continued slowdown in markets revenue this quarter, and instead partying ahead of what may be the imminent release of the Fed's stress test results (perhaps Friday). About one week later will be CCAR results at which the Fed gives the thumbs up or thumbs down on the banks' capital return plans.
- Word is the tests are tougher this year, but bank capital levels are also improved.
- Leading today is Bank of America (BAC +3%) - now within about one percent of a 4-year high. Others: Morgan Stanley (MS +2.8%), Goldman Sachs (GS +1.8%), Ciitgroup (C +1%), JPMorgan (JPM +1.5%), and Wells Fargo (WFC +0.6%).
- Also subject to the stress tests are a number of regional lenders, not to mention credit card players - they're mixed in today's action.
- Related ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAI, IAT, SEF, IYG, FXO, PFI, KBWB, RKH, QABA, FNCL, FINU, KCE, KRU, RWW, KBWR, RYF, PSCF, KRS, FINZ, KBWC
Fri, Jan. 17, 7:36 AM
- Ex-special items, Morgan earned $0.50 per share vs. estimates of $0.45.
- Institutional Securities pre-tax loss of $1.1B compares to pre-tax income of $78M a year ago, but includes legal expenses of $1.2B this quarter. Excluding DVA, revenue of $3.7B rose from $3.6B a year ago. Advisory revenue of $451M about flat Y/Y. Equity underwriting revenue of $416M up form $238M a year ago, while fixed income underwriting revenue of $495M compares to $534M last year. Compensation expense of $1.6B is unchanged from last year.
- FICC revenue of $694M falls 14.4% from $811M a year ago, a bit worse than expectations - maybe a combination of a greater focus on wealth management or losing share to others (Goldman), or both.
- Wealth Management pre-tax income of $709M vs. $562M a year ago on revenue of $3.7B vs. $3.3B. Asset management fees of $2B up 7% Y/Y, transactional revenue of $1.1B up 11.6%.
- Investment Management pre-tax income of $337M vs. $221M a year ago. Pre-tax margin of 40%.
- CC at 10 ET
- Press release
- MS +1.9% premarket
Wed, Jan. 15, 9:03 AM
- "We still have not approached the true earnings potential of Bank of America (BAC)," says CEO Brian Moynihan, leading off the earnings call. The bank reported EPS of $0.29, beating estimates for $0.26, but adjusting for DVA, litigation, and the artificially low tax rate brings core EPS up to $0.42, notes Hedgeye's Josh Steiner.
- CC webcast and presentation slides
- Declining to answer a question about the Fed stress tests and BofA's capital return plans (will the nominal $0.01 dividend be hiked this year), CFO Bruce Thompson notes the bank's Tier 1 common capital ratio is around 9%, higher than the proposed 8.5% minimum which doesn't take effect until 2019.
- The bank cut 5,826 jobs in Q4 - with the cuts coming in branches and mortgage servicing/origination.
- Goldman Sachs (GS) and Morgan Stanley (MS) investors take note: BofA's FICC revenue of $2.1B jumped 16% Y/Y. JPMorgan yesterday reported a 1% Y/Y gain vs. expectations for an 11% decline. The Street expects Goldman to report a 23% decline (after Q3's 44% tumble) and Morgan Stanley an 8% increase. Is a positive surprise looming?
- BAC +2.9% premarket to $17.25, the highest price in nearly 4 years.
Thu, Jan. 2, 10:47 AM
- Trading at 1.2x tangible book value, the stocks of Goldman Sachs (GS +0.1%) and Morgan Stanley (MS -0.7%) look to have mostly priced in management's ability to drive returns above cost of capital, says analyst Keith Horowitz, who nevertheless raises Goldman's PT to $195 and Morgan's to $35.
- Bank of America's (BAC +2.2%) new price target of $19 "reflects a cost of equity more in line with history and no longer impacted by legacy issues."
- Lazard (LAZ -0.5%) - which had a big 2013 - may do little more than tread water this year, says Horowitz, as weak M&A activity weighs on earnings.
- Previous coverage of CIti's BofA upgrade
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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