JMP Securities analyst Devin Ryan has reiterated their neutral stance on MS stock, giving a Hold rating on October 10.
Devin Ryan’s Hold rating on Morgan Stanley’s stock is a result of several key factors. First, the company’s 3Q23 earnings per share (EPS) of $1.38 slightly exceeded Ryan’s estimate of $1.35 and the consensus of $1.28, largely due to modest outperformance in trading and expenses. However, investment banking fell short of Ryan’s model by $82 million, or 8%. While this was offset by a $355 million outperformance in sales and trading, the company did not meet expectations within Global Wealth Management (GWM), where it fell short in both transaction revenue and net interest income.
Furthermore, despite overall deposits remaining roughly flat, Morgan Stanley experienced a significant decrease in low-cost brokerage sweep deposits, which could potentially impact the net interest income guide and may be contributing to the lackluster stock reaction. While non-comp expenses were slightly better than expected, the company’s book value remained flat and there was a stock repurchase of $1.5 billion during the period. Overall, Ryan characterizes the results as mixed with the company delivering respectable results within Institutional Securities Group (ISG) despite a challenging backdrop, but the market will also be focused on the GWM net interest income guide given the softer result there.
According to TipRanks, Ryan is a 5-star analyst with an average return of 13.1% and a 61.79% success rate. Ryan covers the Financial sector, focusing on stocks such as Goldman Sachs Group, Envestnet, and LPL Financial.
In another report released on October 10, UBS also downgraded the stock to a Hold with a $84.00 price target.
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Morgan Stanley (MS) Company Description:
Incorporated in 1935, New York-based Morgan Stanley operates as a global financial services company and provides investment banking products and services to its clients and customers including corporations, governments, financial institutions, and individuals. The bank operates through three segments, including Institutional Securities, Wealth Management, and Investment Management.
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