Morgan Stanley (NYSE: MS) reported fourth-quarter earnings results yesterday morning and the results disappointed investors. The company was expected to report EPS of $0.90 on revenue of $9.44 billion. The actual results showed EPS of $0.80 on revenue of $8.55 billion.
The revenue streams all fell or came in flat with the exception of investment management which was up 7%. Fixed income trading revenue was down 30% and that has been a theme among the banks that have reported this week—lower fixed income trading revenue. Wealth management revenue fell 6% while equity trading revenue and investment banking revenue came in flat.
Looking at the daily chart of Morgan Stanley we see that the stock has been trending lower within the confines of a downward sloped trend channel. The upper rail connects the highs from March to Wednesday. The stock gapped higher on Wednesday as Goldman Sachs beat investor expectations and investors expected the same from Morgan Stanley.
The stock gapped right back down on Thursday after its own earnings results and that means the stock remains within the channel. We also see that the stock was in overbought territory based on the 10-day RSI and the daily stochastic readings. The RSI moved out of overbought territory after Thursday’s decline and the stochastic readings made a bearish crossover.
The financial sector has lagged the overall market over the past year and banking stocks have lagged the financial sector. Morgan Stanley has lagged the overall market, the financial sector, and the banking industry.
MS may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options. In of 34 cases where MS's price broke its lower Bollinger Band, its price rose further in the following month. The odds of a continued upward trend are .
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. of 51 cases where MS's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
The Momentum Indicator moved above the 0 level on May 25, 2023. You may want to consider a long position or call options on MS as a result. In of 79 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
The Moving Average Convergence Divergence (MACD) for MS just turned positive on May 26, 2023. Looking at past instances where MS's MACD turned positive, the stock continued to rise in of 46 cases over the following month. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where MS advanced for three days, in of 322 cases, the price rose further within the following month. The odds of a continued upward trend are .
MS moved below its 50-day moving average on May 01, 2023 date and that indicates a change from an upward trend to a downward trend.
The 50-day moving average for MS moved below the 200-day moving average on May 15, 2023. This could be a long-term bearish signal for the stock as the stock shifts to an downward trend.
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 .
The Aroon Indicator for MS entered a downward trend on May 26, 2023. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
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 78, placing this stock better than average.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding 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 Price Growth Rating for this company is (best 1 - 100 worst), indicating fairly steady price growth. MS’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly 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 (1.522) is normal, around the industry mean (3.566). P/E Ratio (14.388) is within average values for comparable stocks, (36.150). Projected Growth (PEG Ratio) (2.838) is also within normal values, averaging (2.242). Dividend Yield (0.037) settles around the average of (0.038) among similar stocks. P/S Ratio (2.840) is also within normal values, averaging (105.288).
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows