Banking, finance, and taxes

What to Expect When Morgan Stanley Reports Thursday Morning

Chris Lange

Published: July 17, 2019 1:35 pm

Last Updated: January 30, 2020 6:28 pm

Morgan Stanley (NYSE: MS) is scheduled to release its second-quarter financial results before the markets on Thursday. The consensus estimates are calling for $1.14 in earnings per share (EPS) and $9.99 billion in revenue. The same period of last year reportedly had $1.30 in EPS and $10.61 billion in revenue.

Morgan Stanley is one of the top 10 banks repurchasing $125 billion over the next year. This investment house received no objection to its 2019 capital plan, which includes the repurchase of up to $6.0 billion of outstanding common shares for the four-quarter period, an increase from $4.7 billion for the comparable similar period in the 2018 capital plan. Morgan Stanley also will raise its quarterly common stock dividend to $0.35 per share from the current $0.30.

In the first quarter, Morgan Stanley reported that its book value per common share totaled $42.83 while tangible book value per common share was $37.62. The common equity tier 1 capital ratio was 16.5% for the quarter.

At the same time, the firm reported its business segments as follows:

• Institutional Securities net revenues dropped to $5.20 billion from $6.10 billion year over year.
• Wealth Management net revenues increased slightly to $4.39 billion from $4.37 billion.
• Investment Management revenues increased to $804 million from $718 million.

Excluding Wednesday’s move, Morgan Stanley had underperformed the broad markets, with the stock up about 12% year to date. In the past 52 weeks, the stock is actually down about 8%.

A few analysts weighed in on Morgan Stanley ahead of the report:

• Citigroup has a Buy rating and a $52 price target.
• RBC has a Buy rating with a $60 price target.
• BMO Capital Markets rates it as Outperform with a $68 target.
• Wells Fargo has a Buy rating.

Shares of Morgan Stanley traded down about 1% at $43.95 on Wednesday, in a 52-week range of $36.74 to $51.53. The consensus price target is $53.62.