Zacks Investment Research Lowers Morgan Stanley (NYSE:MS) to Sell

Zacks Investment Research cut shares of Morgan Stanley (NYSE:MS) from a hold rating to a sell rating in a research note released on Tuesday morning.

According to Zacks, “Morgan Stanley's shares have outperformed the Zacks categorized Investment Broker industry, over the last six months. However, the company’s higher dependence on trading revenues remains a major concern. Trading revenues are anticipated to be weak in the coming quarter due to lower client activity and this could hurt the company’s top line growth in the near-term. Nevertheless, the company’s efforts to offload its non-core assets to lower balance sheet risk should lead to improvement in profitability.”

A number of other research analysts have also issued reports on the company. Buckingham Research restated a buy rating and set a $54.00 price objective (up previously from $51.00) on shares of Morgan Stanley in a research report on Monday, July 10th. Deutsche Bank AG restated a buy rating on shares of Morgan Stanley in a research report on Monday, July 3rd. J P Morgan Chase & Co restated a buy rating and set a $53.00 price objective on shares of Morgan Stanley in a research report on Monday, June 26th. Royal Bank Of Canada restated a buy rating and set a $50.00 price objective on shares of Morgan Stanley in a research report on Tuesday, June 6th. Finally, Instinet restated a buy rating and set a $50.00 price objective (down previously from $51.00) on shares of Morgan Stanley in a research report on Saturday, June 3rd. Two equities research analysts have rated the stock with a sell rating, six have assigned a hold rating, seventeen have given a buy rating and one has assigned a strong buy rating to the stock. Morgan Stanley has a consensus rating of Buy and an average target price of $45.31.

Morgan Stanley (NYSE MS) traded up 0.29% during midday trading on Tuesday, hitting $45.33. The stock had a trading volume of 5,141,360 shares. The firm has a market cap of $83.85 billion, a PE ratio of 13.45 and a beta of 1.62. Morgan Stanley has a one year low of $27.69 and a one year high of $47.33. The stock has a 50-day moving average price of $43.48 and a 200 day moving average price of $43.64.

Morgan Stanley (NYSE:MS) last issued its earnings results on Wednesday, April 19th. The financial services provider reported $1.00 EPS for the quarter, topping the consensus estimate of $0.90 by $0.10. Morgan Stanley had a return on equity of 9.60% and a net margin of 16.83%. The company had revenue of $9.75 billion during the quarter, compared to analyst estimates of $9.29 billion. During the same quarter last year, the firm earned $0.55 EPS. The business’s revenue was up 25.1% on a year-over-year basis. On average, analysts predict that Morgan Stanley will post $3.39 earnings per share for the current year.

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Morgan Stanley announced that its board has approved a share buyback program on Wednesday, June 28th that permits the company to repurchase $5.00 billion in outstanding shares. This repurchase authorization permits the financial services provider to reacquire up to 6.1% of its shares through open market purchases. Shares repurchase programs are generally a sign that the company’s board believes its shares are undervalued.

In other news, Chairman James P. Gorman sold 212,365 shares of the business’s stock in a transaction on Wednesday, May 10th. The stock was sold at an average price of $42.93, for a total value of $9,116,829.45. Following the sale, the chairman now owns 1,389,378 shares of the company’s stock, valued at approximately $59,645,997.54. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. 0.24% of the stock is currently owned by insiders.

Hedge funds have recently bought and sold shares of the company. Private Asset Management Inc. purchased a new stake in Morgan Stanley during the first quarter worth approximately $344,000. Park National Corp OH raised its stake in shares of Morgan Stanley by 1.0% in the first quarter. Park National Corp OH now owns 6,557 shares of the financial services provider’s stock worth $281,000 after buying an additional 65 shares during the period. Kentucky Retirement Systems Insurance Trust Fund bought a new stake in shares of Morgan Stanley during the fourth quarter worth about $1,973,000. Kentucky Retirement Systems bought a new stake in shares of Morgan Stanley during the fourth quarter worth about $4,421,000. Finally, M Holdings Securities Inc. bought a new stake in shares of Morgan Stanley during the fourth quarter worth about $214,000. 85.26% of the stock is currently owned by institutional investors.

About Morgan Stanley

Morgan Stanley is a financial holding company. The Company’s segments include Institutional Securities, Wealth Management and Investment Management. The Company’s Institutional Securities business segment provides investment banking, sales and trading, and other services to corporations, governments, financial institutions and high-to-ultra high net worth clients.

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