Morgan Stanley Upped to Outperform - Analyst Blog
April 09 2013 - 9:30AM
Zacks
On Apr 5, 2013, we upgraded our long-term recommendation on
Morgan Stanley (MS) to Outperform from Neutral.
The upgradation was based on the Federal Reserve’s approval of its
2013 capital plan.
Why the Upgrade?
In Mar 2013, Morgan Stanley received approval from the Fed to go
ahead with its plan to acquire the remaining 35% stake in Morgan
Stanley Wealth Management (MSWM). Also, approval of its latest
capital plan reinforces the belief that the company’s capital
position remains stable.
Morgan Stanley is expected to announce its first quarter 2013
results on Apr 18. The Zacks Consensus Estimate for the quarter is
pegged at 58 cents per share. The Zacks Earnings ESP (Read: Zacks
Earnings ESP: A Better Method) for Morgan Stanley is 0.00% for the
first quarter. This, along with its Zacks Rank #3 (Hold), lowers
the chance of a positive earnings surprise.
Over the past 60 days, the Zacks Consensus Estimate for 2013 inched
up 1.4% to $2.10 per share. Likewise, the Zacks Consensus Estimate
for 2014 advanced 3.2% to $2.56 over the same period.
Additionally, Morgan Stanley has been lowering its fixed income and
commodities risk-weighted assets (RWAs) since 2009. The company
continues to restructure its fixed income businesses by doing away
with complex structured product businesses. We anticipate reduced
RWAs to free-up capital that could be utilized for enhancing
shareholders’ value.
Other Stocks Worth Considering
Although we prefer Morgan Stanley, there are other global banks
that are worth a look. These include JPMorgan Chase &
Co. (JPM), State Street Corporation (STT)
and Bank of America Corporation (BAC). The first
two carry a Zacks Rank #2 (Buy), while the third stock retains a
Zacks Rank #3.
BANK OF AMER CP (BAC): Free Stock Analysis Report
JPMORGAN CHASE (JPM): Free Stock Analysis Report
MORGAN STANLEY (MS): Free Stock Analysis Report
STATE ST CORP (STT): Free Stock Analysis Report
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