In the latest trading session, Morgan Stanley (MS) closed at $51.10, marking a +0.59% move from the previous day. This move outpaced the S&P 500’s daily gain of 0.34%. Meanwhile, the Dow gained 0.69%, and the Nasdaq, a tech-heavy index, added 0.42%.
Heading into today, shares of the investment bank had gained 0.47% over the past month, lagging the Finance sector’s gain of 2.69% and the S&P 500’s gain of 4.3% in that time.
MS will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.10, down 9.09% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $9.74 billion, down 2.87% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.05 per share and revenue of $42.38 billion. These totals would mark changes of +1.41% and +2.31%, respectively, from last year.
Investors might also notice 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.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. MS is holding a Zacks Rank of #3 (Hold) right now.
Valuation is also important, so investors should note that MS has a Forward P/E ratio of 10.06 right now. For comparison, its industry has an average Forward P/E of 13.39, which means MS is trading at a discount to the group.
We can also see that MS currently has a PEG ratio of 1.05. 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. The Financial – Investment Bank was holding an average PEG ratio of 1.08 at yesterday’s closing price.
The Financial – Investment Bank industry is part of the Finance sector. This group has a Zacks Industry Rank of 71, putting it in the top 28% 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.