Morgan Stanley Stock: Is MS Outperforming the Financial Sector?

Financial (names J - Z) - Morgan Stanley logo and money-by IgorGolovniov via Shutterstock

Based in New York, Morgan Stanley (MS) is renowned as a financial services holding company that provides various financial products and services to corporations, governments, financial institutions, and individuals worldwide. Valued at $156.65 billion by market cap, the company offers a wide range of investment banking, wealth management, and investment management services.

Companies worth $10 billion or more are generally described as “large-cap stocks,” and MS fits that description, signifying its substantial size, stability, and dominance in its industry. The company has a presence in 42 countries.

However, the leading financial services firm has fallen 6.6% from its 52-week high of $103.25, which it hit on May 21. Shares of MS are up 9.1% over the past three months, outperforming the broader US Financials iShares ETF’s (IYF) 1.5% gains over the same time frame.

Longer term, MS shares rose 10% over the past year, and in 2024, the stock is up 1.7%. By contrast, the IYF is up 9.6% on a YTD basis and 27.2% over the past 52 weeks.

To confirm the bullish price trend, MS has been trading above its 50-day moving average since mid-April and above its 200-day moving average since mid-February.

On Apr. 16, MS stock closed up more than 2% after the company reported Q1 wealth management net revenue of $6.88 billion, higher than the consensus estimates of $6.69 billion.

MS’ recent outperformance can be attributed to its robust Q1 results, driven by higher dealmaking and capital market activity. The company’s revenue rose 4% year over year to $15.14 billion, and its EPS came in at $2.02, beating the consensus estimates of $1.66. Its investment banking revenue rose 16% year over year to $1.45 billion, and its wealth management revenue stood at $6.88 billion, up 4.9% from the year-ago quarter. The bank aims to capitalize on the expected recovery in the dealmaking and market positioning it for a solid 2024.

However, rival The Goldman Sachs Group, Inc. (GS) has outperformed both MS and the broader sector. GS stock has gained 32.5% in the past 52 weeks and 15.5% on a YTD basis.

With its recent outperformance compared to the sector, analysts remain optimistic about MS’s prospects. The stock has a consensus rating of “Moderate Buy” from the 23 analysts covering it, but the mean price target of $98.34 is only a 2% premium to current levels.

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On the date of publication, Dipanjan Banchur did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.