Banking, finance, and taxes

Why Morgan Stanley Is Tuesday's Top Bank

Chris Lange

Published: October 17, 2017 11:30 am

Last Updated: January 12, 2020 7:06 am

Morgan Stanley (NYSE: MS) released its most recent quarterly earnings before the markets opened on Tuesday. It was one of two major investment banks that reported this morning. While Goldman Sachs slid on its results, Morgan Stanley proved to be the top investment house on Tuesday.

Morgan Stanley said that it had $0.93 in earnings per share (EPS) and $9.2 billion in revenue. Consensus estimates from Thomson Reuters had called for $0.81 in EPS and revenue of $9.01 billion. In the third quarter of last year, the investment bank posted EPS of $0.80 and $8.91 billion in revenue.

Institutional net revenues for the current quarter were $4.4 billion, compared with $4.6 billion a year ago. This consisted of Investment Banking revenues of $1.3 billion and Sales and Trading net revenues of $2.9 billion.

Wealth Management net revenues totaled $4.2 billion, compared with $3.9 billion, and Investment Management net revenues were $675 million, versus $552 million last year.

Morgan Stanley’s Common Equity Tier 1 and Tier 1 risk-based capital ratios under Standardized Approach transitional provisions were roughly 16.9% and 19.2%, respectively.

At the end of the quarter, book value and tangible book value per common share were $38.87 and $33.86, respectively.

The annualized return on average common equity was 9.6% in the current quarter and 9.8% for the first nine months of 2017.

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Analyst Has 5 Banks to Buy as Investors Sell the Earnings

James P. Gorman, board chair and chief executive, commented:

Our third quarter results reflected the stability our Wealth Management, Investment Banking and Investment Management businesses bring when our Sales and Trading business faces a subdued environment. Our balanced business model and the consistent performance of our franchise enabled us to deliver solid returns for our shareholders.

Shares of Morgan Stanley were about 1.7% at $49.75 Tuesday morning, with a consensus analyst price target of $50.96 and a 52-week trading range of $32.04 to $49.79.