Morgan Stanley (NYSE:MS) Lowered to “Sell” at Zacks Investment Research

Zacks Investment Research downgraded shares of Morgan Stanley (NYSE:MS) from a hold rating to a sell rating in a research report sent to investors on Tuesday, July 11th.

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.”

Several other equities analysts have also commented on the company. Compass Point lowered Morgan Stanley from a neutral rating to a sell rating and set a $34.00 target price for the company. in a report on Monday, March 27th. They noted that the move was a valuation call. Vetr lowered Morgan Stanley from a hold rating to a sell rating and set a $39.48 target price for the company. in a report on Monday, March 27th. Instinet reaffirmed a buy rating and set a $50.00 target price (down from $51.00) on shares of Morgan Stanley in a report on Saturday, June 3rd. Buckingham Research reaffirmed a buy rating and set a $54.00 target price (up from $51.00) on shares of Morgan Stanley in a report on Monday, July 10th. Finally, HSBC Holdings plc reaffirmed a neutral rating and set a $45.00 target price on shares of Morgan Stanley in a report on Tuesday, April 25th. One analyst has rated the stock with a sell rating, nine have assigned a hold rating, sixteen have assigned a buy rating and one has given a strong buy rating to the company. Morgan Stanley currently has an average rating of Buy and an average target price of $48.02.

Morgan Stanley (NYSE MS) opened at 45.65 on Tuesday. The firm has a 50 day moving average price of $46.14 and a 200 day moving average price of $44.39. Morgan Stanley has a 52 week low of $29.31 and a 52 week high of $48.90. The stock has a market capitalization of $83.84 billion, a P/E ratio of 13.08 and a beta of 1.63.

Morgan Stanley (NYSE:MS) last announced its quarterly earnings data on Wednesday, July 19th. The financial services provider reported $0.87 earnings per share (EPS) for the quarter, beating the Thomson Reuters’ consensus estimate of $0.76 by $0.11. The firm had revenue of $9.50 billion for the quarter, compared to analysts’ expectations of $9.05 billion. Morgan Stanley had a return on equity of 9.83% and a net margin of 16.77%. Morgan Stanley’s revenue for the quarter was up 6.7% compared to the same quarter last year. During the same quarter in the prior year, the firm posted $0.75 earnings per share. Equities research analysts predict that Morgan Stanley will post $3.50 earnings per share for the current year.

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The business also recently disclosed a quarterly dividend, which will be paid on Tuesday, August 15th. Stockholders of record on Monday, July 31st will be given a dividend of $0.25 per share. This represents a $1.00 dividend on an annualized basis and a dividend yield of 2.19%. The ex-dividend date is Thursday, July 27th. This is an increase from Morgan Stanley’s previous quarterly dividend of $0.20. Morgan Stanley’s dividend payout ratio is 28.65%.

Morgan Stanley announced that its board has initiated a share buyback plan on Wednesday, June 28th that allows the company to repurchase $5.00 billion in shares. This repurchase authorization allows the financial services provider to buy up to 6.1% of its stock through open market purchases. Stock repurchase plans are usually a sign that the company’s leadership believes its shares are undervalued.

In other news, Chairman James P. Gorman sold 212,366 shares of the stock in a transaction on Tuesday, August 1st. The stock was sold at an average price of $47.26, for a total value of $10,036,417.16. Following the completion of the sale, the chairman now owns 1,602,609 shares in the company, valued at $75,739,301.34. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through the SEC website. Also, CFO Jonathan Pruzan sold 25,767 shares of the company’s stock in a transaction on Thursday, July 20th. The stock was sold at an average price of $46.68, for a total transaction of $1,202,803.56. Following the completion of the transaction, the chief financial officer now directly owns 196,708 shares in the company, valued at $9,182,329.44. The disclosure for this sale can be found here. 0.35% of the stock is owned by corporate insiders.

Institutional investors have recently bought and sold shares of the company. Elkhorn Investments LLC bought a new position in Morgan Stanley during the fourth quarter worth $956,000. Dodge & Cox acquired a new position in Morgan Stanley during the fourth quarter valued at approximately $232,000. Lincluden Management Ltd. increased its position in Morgan Stanley by 13.4% in the fourth quarter. Lincluden Management Ltd. now owns 257,628 shares of the financial services provider’s stock valued at $10,885,000 after buying an additional 30,533 shares during the last quarter. Quadrature Capital Ltd increased its position in Morgan Stanley by 130.8% in the fourth quarter. Quadrature Capital Ltd now owns 14,700 shares of the financial services provider’s stock valued at $621,000 after buying an additional 8,330 shares during the last quarter. Finally, Ibex Wealth Advisors acquired a new position in Morgan Stanley during the fourth quarter valued at approximately $3,200,000. 85.67% of the stock is currently owned by institutional investors and hedge funds.

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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