Oppenheimer Maintains Outperform on Morgan Stanley After Weak Quarter
Oppenheimer has published a research report on Morgan Stanley (NYSE: MS) after the company reported a revenue beat despite a weak quarter.
In the report, Oppenheimer writes, "Like all its peers, Morgan Stanley's results clearly bore the scars of the weak operating environment, as well as the $1.7B previously disclosed loss on its MBI position (which was a major positive from a capital perspective; see our note MBIA Settlement, dated Dec. 15, 2011), but all things considered was somewhat better than we had expected. Depending on how one treats a $600M CVA gain, which had previously been a drag on earnings and was closed out this quarter at a gain, one could put the "core" EPS at either $0.19 or $0.41. This is still only an ROTE of 3%-6%, but it is a meaningful level of profitability in a dreadful environment."
Oppenheimer maintains its Outperform rating and $28 price target on Morgan Stanley, which is currently trading up $0.90 from yesterday's $17.35 closing price.
