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Why the Market Dipped But Morgan Stanley (MS) Gained Today

Morgan Stanley (MS) closed the most recent trading day at $81.21, moving +0.4% from the previous trading session. The stock's performance was ahead of the S&P 500's daily loss of 0.54%. At the same time, the Dow lost 0.11%, and the tech-heavy Nasdaq lost 0.84%.

Shares of the investment bank have appreciated by 6.07% over the course of the past month, underperforming the Finance sector's gain of 10.48% and the S&P 500's gain of 8.62%.

The investment community will be paying close attention to the earnings performance of Morgan Stanley in its upcoming release. The company is slated to reveal its earnings on January 16, 2024. The company is expected to report EPS of $1.23, down 6.11% from the prior-year quarter. Meanwhile, the latest consensus estimate predicts the revenue to be $12.93 billion, indicating a 1.41% increase compared to the same quarter of the previous year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $5.58 per share and revenue of $54.1 billion. These totals would mark changes of -12.26% and +0.8%, respectively, from last year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Morgan Stanley. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.02% higher within the past month. Morgan Stanley is currently sporting a Zacks Rank of #3 (Hold).

From a valuation perspective, Morgan Stanley is currently exchanging hands at a Forward P/E ratio of 14.5. This valuation marks a discount compared to its industry's average Forward P/E of 16.6.

We can additionally observe that MS currently boasts a PEG ratio of 2.36. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. As of the close of trade yesterday, the Financial - Investment Bank industry held an average PEG ratio of 1.5.

The Financial - Investment Bank industry is part of the Finance sector. This group has a Zacks Industry Rank of 206, putting it in the bottom 19% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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Zacks Investment Research