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Morgan Stanley (MS) Gains But Lags Market: What You Should Know

Morgan Stanley (MS) closed at $44.30 in the latest trading session, marking a +1.03% move from the prior day. This change lagged the S&P 500's 1.06% gain on the day. Elsewhere, the Dow gained 0.83%, while the tech-heavy Nasdaq added 1.72%.

Coming into today, shares of the investment bank had lost 7.08% in the past month. In that same time, the Finance sector gained 0.25%, while the S&P 500 lost 2.09%.

Investors will be hoping for strength from MS as it approaches its next earnings release, which is expected to be January 17, 2019. On that day, MS is projected to report earnings of $1 per share, which would represent year-over-year growth of 19.05%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $9.59 billion, up 1% from the year-ago period.

MS's full-year Zacks Consensus Estimates are calling for earnings of $4.94 per share and revenue of $41.15 billion. These results would represent year-over-year changes of +37.22% and +8.46%, respectively.

It is also important to note the recent changes to analyst estimates for MS. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 3.66% higher. MS is currently a Zacks Rank #3 (Hold).

Looking at its valuation, MS is holding a Forward P/E ratio of 8.88. Its industry sports an average Forward P/E of 12.45, so we one might conclude that MS is trading at a discount comparatively.

We can also see that MS currently has a PEG ratio of 0.76. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. MS's industry had an average PEG ratio of 0.8 as of yesterday's close.

The Financial - Investment Bank industry is part of the Finance sector. This group has a Zacks Industry Rank of 94, putting it in the top 37% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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