3 Morgan Stanley Analysts Tackle Bank's Tough Q2 Report: Why One Sees 'Other Signs Of Resilience'

Zinger Key Points
  • Three Street analyst shared takes Friday on Morgan Stanley's quarterly report.
  • Morgan Stanley shares were trading 5.22% higher to $78.59 on Friday.

Global investment bank and wealth management company Morgan Stanley MS reported second-quarter financial results Thursday. Here's what the Street has to say. 

3 Morgan Stanley Analysts On Earnings: BMO analyst James Fortheringham has an Outperform rating and lowered the price target from $105 to $99.

JMP Securities analyst Devin Ryan has a Market Perform rating. 

RBC Capital analyst Gerard Cassidy has a Sector Perform rating and $80 price target.

Related Link: Analyst Says Goldman Sachs, Well Fargo Offer Most Interesting Risk-Reward Ahead Of Bank Earnings Week

The Takeaways On Morgan Stanley: Fotheringham called the quarter challenging, with slower organic growth and lackluster fees. The analyst does see several positives versus peers.

“MS’s meaningful excess capital and low-risk loan book position it, in our view, better than peers to repurchase shares,” Fotheringham said.

The analyst said investors are undervaluing Morgan Stanley’s wealth management and investment management business lines.

Ryan points to a diverse range of products offered by Morgan Stanley as a positive while reiterating a Market Perform rating.

“We were encouraged by other signs of resilience in the business,” Ryan said referencing lower fee-based revenues.

The analyst also liked optimism from management when discussing the outlook for the company.

“The company still has plenty of revenue to support strong investment back in the business, and it remains well positioned to lean in on buybacks after faring better on a relative basis than some peers in last month’s annual Fed stress test.”

A challenging market for investment banking weighed on second-quarter results for Morgan Stanley, according to Cassidy.

“A deepening Bear market will weigh further on its results but a recovery in market conditions will drive higher revenue and profitability,” Cassidy said.

The analyst sees the company focusing on managing expenses if market conditions don’t improve.

Morgan Stanley completed its $12-billion share buyback plan and has a new multiyear, $20-billion buyback, the analyst highlighted.

MS Price Action: Morgan Stanley shares were trading 5.22% higher to $78.59 on Friday versus a 52-week range of $72.05 to $109.73.

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Posted In: Analyst ColorNewsPrice TargetReiterationAnalyst RatingsMoversTrading Ideasbank stocksBMODevin RyanGerard CassidyJames FortheringhamJMP SecuritiesRBC CapitalShare Buybackswealth management stocks