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This Analyst Thinks Morgan Stanley And The Seattle Seahawks Have A Lot In Common

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This Analyst Thinks Morgan Stanley And The Seattle Seahawks Have A Lot In Common

Morgan Stanley (NYSE: MS) missed its fourth quarter earnings estimate when it declared results on back of weaker bond trading revenues. Mike Mayo, CLSA analyst, was on CNBC to dissect the bank’s financial results.

"Morgan Stanley lost the quarter, but won the year," Mayo said. "They're little bit like the Seattle Seahawks: tough conditions, made a few mistakes, but they still won the game. Fourth quarter was their first earnings miss in 10 quarters, they had bad trading, the revenues fell short, but for the year Morgan Stanley had the best revenue growth for each investment banking, equities and fixed income."

He continued, "The bank results so far are lousy in the fourth quarter, but we would not extrapolate fourth-quarter results and for Morgan Stanley we expect revenues in 2015 to be on average 13 percent higher than where they were in the fourth-quarter."

Related Link: Morgan Stanley Shares Slip After Downbeat Q4 Earnings

Can All Units Of A Large Bank Show Growth Simultaneously? Ever?

"Well there’s ongoing issues about too big to manage and too big to analyze and too big to breakup and we have been proponent of at least more aggressive restructuring at these banks, but at Morgan Stanley directionally, you have the wealth management business, one half the company versus one third, pre-crisis," Mayo said.

"So, a lot more annuity-like revenues at Morgan Stanley. And of course fixed-income trading down for Morgan Stanley and the industry by over one-third just in the third quarter and the fourth quarter -- you can never fully get your arms around that, but I think it's a lot more contained compared to where it was in past and the balance sheets are a lot more resilient."

Image credit: sashimomura, Flickr

Latest Ratings for MS

DateFirmActionFromTo
Mar 2021Daiwa CapitalUpgradesNeutralOutperform
Jan 2021Credit SuisseMaintainsOutperform
Jan 2021BarclaysUpgradesEqual-WeightOverweight

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