Benzinga - by Surbhi Jain, .
Morgan Stanley (NYSE:MS), will be reporting its fourth-quarter earnings on Jan. 16. Wall Street expects the company to announce 99 cents in EPS and $11.61 billion in revenues as it reports before market hours.
The financial sector firm is known for its presence across investment banking, securities trading, wealth management, and asset management, at a global level. Morgan Stanley’s diversified revenue streams, unique lending operations, and conservative financial structure position it as a notable player in the financial sector.
However, Morgan Stanley’s stock has underperformed the broad market SPY by 16% in 2023. For the past year, it has lagged most of its peers, except Charles Schwab Corp (NYSE:SCHW) and Raymond James Financial (NYSE:RJF).
As the company reports Q4 2023 earnings, here's what analysts will be focusing on, and how the stock currently maps against Wall Street estimates.
Business & Fundamentals: Morgan Stanley’s revenue structure is marked by a notable presence in trading operations, contributing 28.05%, and a substantial share from asset management at 36.30%. While these segments are sensitive to market fluctuations, the company’s diversified revenue streams position it as a resilient player in the volatile financial markets.
Morgan Stanley’s financial structure reflects a conservative stance on debt, with an annual growth rate of 4.4%. Concurrently, the institution has bolstered its cash reserves by an impressive 56.1% annually, surpassing the growth in debt.
The firm earns interest through lending operations, with a distinct focus on stock-based loans and residential mortgages. This strategic approach sets Morgan Stanley apart from its peers, showcasing a nuanced understanding of the financial sector and allowing for flexibility in response to market dynamics.
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Q4 Analysts' Focus: While market-sensitive segments bring inherent volatility, the company’s effective debt management strategies and strong financial results present it as a potentially attractive investment option. However, it remains to be seen if Morgan Stanley can sustain this resilience throughout the year, a factor analysts will be closely monitoring.
Ratings & Consensus Estimates: Consensus analyst ratings for MS stock currently stand at Neutral with a price target of $86.36. However, analyst reviews, published this month, paint a better picture for the stock.
UBS, JPMorgan and HSBC, who published their reviews on Jan. 9 have a price target of $95, $94 and $96, respectively on Morgan Stanley’s stock. BofA Securities rated the stock a Buy with a price target on $100 on Jan. 4 and Barclays rated the stock Overweight with a price target of $116 on Jan. 2.
Price Action: Morgan Stanley stock closed 0.89 lower on Friday at $89.70.
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