US investment bank Morgan Stanley release earnings this week, with the stock looking to build on a rally this week.
MS: Weekly Chart
The price of MS has rallied this week and has a chance to get back above the $81.77 resistance line for a move towards $88.
Morgan Stanley is reporting its Q3 earnings on October 18, with 19 analysts expecting earnings of $1.31 per share compared to $1.53 per share in the same quarter of the previous year. Wall Street analysts are also expecting the company to report revenue of $13.22 billion, an increase from $12.99 billion.
The company’s share price is down around 6% year-to-date. The bank’s shift to a focus on wealth management rather than trading has helped, but competition is fierce, and growing revenue in that environment will be difficult.
Still, sentiment remains bullish on the stock, with 15 of 26 brokerages assigning a buy or strong buy rating. Another 10 have hold ratings.
The consensus estimate for third-quarter revenue is $13.22 billion, down 1.7% sequentially and up 1.8% year over year. The adjusted EPS forecast of $1.31 would be down 8.6% sequentially and 15.0% lower year over year. For the full 2023 fiscal year, analysts are looking for revenue of $54.47 billion, up 1.5%, and EPS of $5.58, down 12.3%.
Morgan Stanley currently trades at 14 times expected 2023 EPS and 11.6 times estimated 2024 earnings of $6.78.
Meanwhile, the bank’s equity analyst, Mike Wilson, said a year-end rally in the S&P 500 is “more likely than not.”
“Many are still leaning longer than they would like to reduce the probability of missing out in a year in which narrow mega cap strength has driven benchmarks,” his report said.
Morgan Stanley maintains its $3,900 year-end price target for the S&P 500.
