Zacks Investment Research Upgrades Morgan Stanley (NYSE:MS) to “Hold”

Zacks Investment Research upgraded shares of Morgan Stanley (NYSE:MS) from a sell rating to a hold rating in a research report report published on Monday, July 24th.

According to Zacks, “Morgan Stanley's shares have significantly outperformed the industry, over the last six months. The company’s second-quarter 2017 earnings surpassed the Zacks Consensus Estimate, mainly driven by improved equity trading and a rise in underwriting income. The company’s efforts to offload its non-core assets to lower balance sheet risk and cost saving efforts will likely lead to improvement in profitability. These initiatives, along with enhanced capital deployment should boost investors’ confidence in the stock.  However, continued fall in corporate loan balances remains a concern for the company. This is most likely the primary reason for decrease in net interest income despite rise in interest rates.”

MS has been the subject of several other research reports. Compass Point lowered Morgan Stanley from a neutral rating to a sell rating and set a $34.00 price objective for the company. in a research report on Monday, March 27th. They noted that the move was a valuation call. J P Morgan Chase & Co reissued a buy rating on shares of Morgan Stanley in a research report on Tuesday, May 23rd. Deutsche Bank AG reissued a buy rating on shares of Morgan Stanley in a research report on Monday, July 3rd. Vetr lowered Morgan Stanley from a hold rating to a sell rating and set a $39.48 price target for the company. in a research report on Monday, March 27th. Finally, Citigroup Inc. lifted their price target on Morgan Stanley from $44.00 to $46.00 and gave the stock a neutral rating in a research report on Tuesday, April 25th. One research analyst has rated the stock with a sell rating, nine have assigned a hold rating, fifteen have issued a buy rating and one has issued a strong buy rating to the company’s stock. The stock presently has an average rating of Buy and an average price target of $48.57.

Shares of Morgan Stanley (NYSE:MS) traded up 0.67% during trading on Monday, hitting $45.39. 7,284,026 shares of the stock were exchanged. The firm has a 50 day moving average price of $46.38 and a 200 day moving average price of $44.47. The firm has a market capitalization of $83.36 billion, a P/E ratio of 13.00 and a beta of 1.63. Morgan Stanley has a 52 week low of $30.39 and a 52 week high of $48.90.

Morgan Stanley (NYSE:MS) last announced its quarterly earnings data on Wednesday, July 19th. The financial services provider reported $0.87 EPS for the quarter, beating the consensus estimate of $0.76 by $0.11. The business had revenue of $9.50 billion during the quarter, compared to analyst estimates of $9.05 billion. Morgan Stanley had a return on equity of 9.83% and a net margin of 16.77%. The company’s revenue for the quarter was up 6.7% on a year-over-year basis. During the same quarter last year, the firm posted $0.75 earnings per share. Analysts forecast that Morgan Stanley will post $3.50 EPS for the current fiscal year.

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Morgan Stanley declared that its board has approved a share buyback program on Wednesday, June 28th that allows the company to repurchase $5.00 billion in outstanding shares. This repurchase authorization allows the financial services provider to repurchase up to 6.1% of its shares through open market purchases. Shares repurchase programs are generally an indication that the company’s management believes its shares are undervalued.

The firm also recently declared a quarterly dividend, which was paid on Tuesday, August 15th. Investors of record on Monday, July 31st were issued a $0.25 dividend. The ex-dividend date was Thursday, July 27th. This is a boost from Morgan Stanley’s previous quarterly dividend of $0.20. This represents a $1.00 dividend on an annualized basis and a yield of 2.20%. Morgan Stanley’s payout ratio is currently 28.65%.

In other news, CFO Jonathan Pruzan sold 25,767 shares of the company’s stock in a transaction that occurred on Thursday, July 20th. The stock was sold at an average price of $46.68, for a total transaction of $1,202,803.56. Following the sale, the chief financial officer now directly owns 196,708 shares of the company’s stock, valued at approximately $9,182,329.44. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, Chairman James P. Gorman sold 212,366 shares of the company’s stock in a transaction that occurred on Tuesday, August 1st. The stock was sold at an average price of $47.26, for a total value of $10,036,417.16. Following the sale, the chairman now directly owns 1,602,609 shares in the company, valued at $75,739,301.34. The disclosure for this sale can be found here. 0.35% of the stock is currently owned by insiders.

Several hedge funds have recently modified their holdings of the company. Lee Danner & Bass Inc. boosted its stake in shares of Morgan Stanley by 0.3% in the first quarter. Lee Danner & Bass Inc. now owns 8,685 shares of the financial services provider’s stock valued at $372,000 after buying an additional 22 shares during the period. Guardian Life Insurance Co. of America raised its stake in Morgan Stanley by 0.5% in the first quarter. Guardian Life Insurance Co. of America now owns 5,551 shares of the financial services provider’s stock valued at $238,000 after buying an additional 25 shares during the last quarter. First Citizens Bank & Trust Co. raised its stake in Morgan Stanley by 0.4% in the first quarter. First Citizens Bank & Trust Co. now owns 9,488 shares of the financial services provider’s stock valued at $406,000 after buying an additional 34 shares during the last quarter. Smithfield Trust Co. raised its stake in Morgan Stanley by 1.2% in the second quarter. Smithfield Trust Co. now owns 3,690 shares of the financial services provider’s stock valued at $164,000 after buying an additional 42 shares during the last quarter. Finally, Park National Corp OH raised its stake in Morgan Stanley by 1.0% in the first quarter. Park National Corp OH now owns 6,557 shares of the financial services provider’s stock valued at $281,000 after buying an additional 65 shares during the last quarter. 85.47% of the stock is currently owned by institutional investors and hedge funds.

About Morgan Stanley

Morgan Stanley is a financial holding company. The Company’s segments include Institutional Securities, Wealth Management and Investment Management. The Company’s Institutional Securities business segment provides investment banking, sales and trading, and other services to corporations, governments, financial institutions and high-to-ultra high net worth clients.

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