Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Equities  >  Nyse  >  Morgan Stanley    MS

MORGAN STANLEY

(MS)
  Report  
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsPress ReleasesOfficial PublicationsSector newsMarketScreener StrategiesAnalyst Recommendations

Morgan Stanley Profit Grows -- WSJ

share with twitter share with LinkedIn share with facebook
share via e-mail
0
10/18/2019 | 02:49am EST

By Liz Hoffman

Morgan Stanley's third-quarter profit rose 3% from a year ago, the last major U.S. bank to skate through a period of global tensions and shifting markets.

The bank's profit of $2.17 billion, or $1.27 a share, on $10.03 billion in revenue, was helped by a one-time tax benefit. It was better than investors were expecting and sent shares up 1.52% on Thursday.

Analysts polled by FactSet had expected a profit of $1.83 billion, or $1.11 a share, on $9.59 billion in revenue. Morgan Stanley picked up 6 cents a share in earnings thanks to lower taxes; accounting for that, profit was down 5% from a year ago.

"We remain cautious today, as trade talks swirl and interest-rate paths continue to be debated," Chief Executive James Gorman said. "But expect us to look beyond the next few months."

Morgan Stanley is the last of the big U.S. banks to report earnings for the third quarter, a stretch in which two Federal Reserve interest-rate cuts and growing global tensions upended the relative calm and easy financial policies that have helped banks thrive in recent years.

The results were mixed: JPMorgan Chase & Co. and Citigroup Inc. sailed through on the backs of their big consumer banks. One-time charges muddied the results at Bank of America Corp. and Wells Fargo & Co. Goldman Sachs Group Inc.'s expensive pivot into Main Street banking ate into profits.

Morgan Stanley's return on equity, a measure of profitability, was 10.7% for the quarter, accounting for the tax benefit, versus a range of 8.5% to 15% at peers.

Mr. Gorman, in the job since 2010, is in the late innings of a multiyear turnaround. He cut costs, shrank the company's trading division and doubled down on wealth management, a steadier business that now accounts for nearly half of Morgan Stanley's revenue.

He has sounded more acquisitive in recent months but must contend with skeptical investors. Morgan Stanley's shares trade below the net value of its assets, which makes it a lousy currency to use in any takeover, particularly in asset management, an area Mr. Gorman has been scouting and where stocks tend to be more expensive.

On Thursday, he escalated a long-running gripe with regulators: that Morgan Stanley is still being treated like the Wall Street problem child it was during the financial crisis.

"One ongoing challenge of our continued pursuit of higher [returns] has been the amount of equity we're required to hold, despite how we've repositioned the firm," he said.

Morgan Stanley's total assets crossed $900 billion at the end of the quarter for the first time since 2008 and executives appear itchy for a sign that regulators will let it keep growing.

The firm already tested the waters in Washington this year by acquiring Solium Capital, a startup that manages stock that corporate employees receive as part of their pay.

"We have the capacity to grow," Chief Financial Officer Jonathan Pruzan said in an interview. "The question is what the Fed is going to tell us and when they're going to tell us."

Solium is intended to funnel new clients into Morgan Stanley's giant wealth-management division, which manages $2.6 trillion. Its 15,500 brokers have pivoted in recent years from plugging stocks and earning trading commissions to charging a flat fee to advise people on how to invest.

Analysts have warned that price wars between discount brokerages could creep into the wealth-management business, as firms such as Charles Schwab Corp. try to recoup lost commissions by edging into advice. Mr. Gorman dismissed those concerns, suggesting that discount firms weren't sophisticated enough to handle the wealthiest clients.

"It's complicated stuff and being wrong absolutely overwhelms a few basis points on the fees," he said. Morgan Stanley is focused on households with more than $10 million to invest, which Mr. Gorman said require more complicated advice on trusts, family foundations and taxes: "That's where the advice fee is very fair," he said.

Revenue from investment banking rose 5% from a year ago as a funk settled over what had been a red-hot run for stock offerings. Equity underwriting fees fell 9%, offset by a rise in revenue from mergers and debt placements. Mr. Pruzan cited a notable decline in initial public offerings, which are on track for their worst year since 2016, according to Refinitiv.

Morgan Stanley's asset-management arm reported 17% higher revenue, though it remains a blip on the firm's bottom line. It took in new money in both stock and debt funds, though market-price declines ate into those flows and assets ticked up just 2% from the end of June.

A 1% drop in stock trading revenue puts Morgan Stanley in the middle of the pack this quarter but strong enough to defend its No. 1 position in that business. In fixed-income trading, revenue was up 21% from a year ago but fees across Wall Street keep falling, validating for now Morgan Stanley's decision to shrink that business.

"Two years I thought we'd hit the low point, then last year was smaller, " Mr. Pruzan said of fixed-income fees industrywide. "The market isn't growing."

Write to Liz Hoffman at liz.hoffman@wsj.com

Stocks mentioned in the article
ChangeLast1st jan.
BANK OF AMERICA CORPORATION -0.24% 33.18 Delayed Quote.34.98%
CITIGROUP INC. -0.68% 75.6 Delayed Quote.45.22%
GOLDMAN SACHS GROUP INC. -1.74% 219.03 Delayed Quote.33.44%
JPMORGAN CHASE & CO. -0.35% 129.92 Delayed Quote.33.56%
MORGAN STANLEY -0.12% 49.09 Delayed Quote.23.81%
THE CHARLES SCHWAB CORPORATION -0.71% 43.23 Delayed Quote.4.09%
WELLS FARGO & COMPANY -0.09% 54.05 Delayed Quote.17.30%
share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on MORGAN STANLEY
11/11WALL STREET STOCK EXCHANGE : S&P 500, Nasdaq slip on trade uncertainty
RE
11/11Royal Dutch Shell plc Transaction In Own Shares
DJ
11/09ALIBABA HIRES MORE BANKS ON UP TO $1 : sources
RE
11/08Royal Dutch Shell plc Transaction In Own Shares
DJ
11/08MORGAN STANLEY : French Regulator Asks for EUR25 Million Penalty Against Morgan ..
DJ
11/08EXCLUSIVE : Boon for Hong Kong as Alibaba plans $15 billion listing in late Nove..
RE
11/08Chinese digital agency pushes on with $400 million U.S. IPO - sources
RE
11/07Royal Dutch Shell plc Transaction In Own Shares
DJ
11/07EXCLUSIVE : Air Liquide puts German disinfectants maker Schuelke on the block - ..
RE
11/07UniCredit Gross Proceeds From Mediobanca Stake Sale EUR785 Million
DJ
More news
Financials (USD)
Sales 2019 40 161 M
EBIT 2019 10 736 M
Net income 2019 8 137 M
Debt 2019 150 B
Yield 2019 2,70%
P/E ratio 2019 9,75x
P/E ratio 2020 9,37x
EV / Sales2019 5,70x
EV / Sales2020 5,60x
Capitalization 78 599 M
Chart MORGAN STANLEY
Duration : Period :
Morgan Stanley Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends MORGAN STANLEY
Short TermMid-TermLong Term
TrendsBullishBullishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 27
Average target price 52,38  $
Last Close Price 48,56  $
Spread / Highest target 42,1%
Spread / Average Target 7,88%
Spread / Lowest Target -21,7%
EPS Revisions
Managers
NameTitle
James Patrick Gorman Chairman & Chief Executive Officer
Jonathan M. Pruzan Chief Financial Officer & Executive Vice President
Robert Rooney Head-Technology
Hutham S. Olayan Independent Director
Robert H. Herz Independent Director
Sector and Competitors
1st jan.Capitalization (M$)
MORGAN STANLEY23.81%78 599
GOLDMAN SACHS GROUP INC.33.44%77 340
THE CHARLES SCHWAB CORPORATION4.09%56 313
CITIC SECURITIES COMPANY40.04%36 034
HUATAI SECURITIES CO., LTD.9.32%21 445
NOMURA HOLDINGS, INC.25.22%14 955