Morgan Stanley (MS, $47.55) beats analyst's estimates (barely)
Despite a 9% drop on the quarterly earnings, Morgan Stanley, the sixth largest U.S. bank, managed to marginally beat analysts’ estimates.
Morgan Stanley's wealth management business salvaged earnings for the quarter, as it accounts for almost half of the bank’s revenue and helps maintain stability during weak periods for trading and investment banking -- the two segments that suffered during the first quarter due to subdued volatility. Besides the resilience of the wealth management sector, the bank also managed to cut non-interest expenses by 4%, which helped boost its bottom line.
MS's two important metrics reported estimate beating results - quarterly profit came at $2.34 billion, or $1.39 per share versus estimate of $1.17 per share; and revenue fell 7% to $10.29 billion versus an estimate of $9.93 billion.
Overall, wealth management proved to be the only sector that could protect margin against an unfavorable backdrop owing to slowing global economy, absence of interest hike this year, and trade disputes between U.S. and China. Despite this scenario, Morgan Stanley’s wealth management profit margin and its return on equity of 13.1% were comfortably within the targeted range. Perhaps this is also the reason why the company’s CEO has not lifted performance targets for wealth management because the business can produce returns of nearly 25% even in difficult times. Wealth management revenue rose slightly from a year ago, with profit margins holding steady at 27%.
In short, Morgan Stanley is in a better position even than its top rival Goldman Sachs Group (GS), which reported a 20% profit decline and lower revenue across nearly all its major businesses, sending its shares down more than 3%.
MS saw its Stochastic Oscillator recovers from the overbought zone
The Stochastic Oscillator for MS moved out of overbought territory on November 26, 2024. This could be a bearish sign for the stock and investors may want to consider selling or taking a defensive position. A.I.dvisor looked at 62 similar instances where the indicator exited the overbought zone. In of the 62 cases the stock moved lower. This puts the odds of a downward move at .
Technical Analysis (Indicators)
Bearish Trend Analysis
The 10-day RSI Indicator for MS moved out of overbought territory on November 25, 2024. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 38 similar instances where the indicator moved out of overbought territory. In of the 38 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Momentum Indicator moved below the 0 level on November 26, 2024. You may want to consider selling the stock, shorting the stock, or exploring put options on MS as a result. In of 71 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for MS turned negative on November 22, 2024. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 41 similar instances when the indicator turned negative. In of the 41 cases the stock turned lower in the days that followed. This puts the odds of success at .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where MS declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
MS broke above its upper Bollinger Band on November 06, 2024. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Bullish Trend Analysis
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where MS advanced for three days, in of 349 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Aroon Indicator entered an Uptrend today. In of 299 cases where MS Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating outstanding price growth. MS’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 68, placing this stock better than average.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to consistent earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.694) is normal, around the industry mean (5.702). P/E Ratio (18.056) is within average values for comparable stocks, (34.442). Projected Growth (PEG Ratio) (3.334) is also within normal values, averaging (2.610). Dividend Yield (0.036) settles around the average of (0.030) among similar stocks. P/S Ratio (3.039) is also within normal values, averaging (112.495).
Notable companies
Industry description
Market Cap
High and low price notable news
Volume
Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
General Information
a provider of diversified financial services including brokerage, investment management and venture capital services
Industry InvestmentBanksBrokers