Morgan Stanley Stock (NYSE:MS)
Morgan Stanley (NYSE:MS), an investment bank and brokerage, is forecast to report a decline in revenue for the first quarter due to a dip in fee income due to the market downturn.
According to Barclays analyst Jason Goldberg, Morgan Stanley’s revenue is expected to fall slightly from the first quarter of 2022. This is because of harsh comps in trading and ongoing investment banking weakness. The analyst has reduced his price objective for the Morgan Stanley stock from $125 to $112. However, he still gives the business an Overweight rating since he believes wealth management and investment management “provide ballasts.”
On Wednesday, April 19th, the financial holding firm will reveal its quarterly profits before the market opens.
Revenue is expected to be $13.96B (-5.7% Y/Y), while earnings per share are predicted to be $1.66 (-19.4% Y/Y).
In the previous two years, MS has outperformed expectations for earnings per share 88% of the time and sales 63% of the time.
In the last three months, there have been two upgrades to EPS forecasts and eight cuts. There have been 3 increases and 8 decreases in revenue forecasts.
Provisions concerns heightened in the first quarter because Morgan Stanley, like rival Goldman Sachs, had promised to infuse $2.5 billion into First Republic Bank. Compared to the net provisions of $972M in Q4 and $561M in Q1 of the previous year, GS’s provision for credit losses in Q1 was a net gain of $171M.
As a result of declines in investment banking fees and fixed-income trading revenue, Goldman Sachs’ Q1 revenue fell short of the average analyst forecast.
Charles Schwab, another industry competitor, also missed Q1 sales expectations. While SCHW’s net interest income increased year over year, bank deposits and trading revenue both fell. The retail brokerage anticipates revenue difficulties in the short term due to increasing financing expenses.
Institutional securities, wealth management, and investment management are the three main divisions under which Morgan Stanley operates. Investment banking, investments, and asset management contributed to a fall in Q4 profits.
The Morgan Stanley stock has an average price objective of $98.01 and a Buy rating from Wall Street analysts. The current price of MS stock is $90.42.
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Author Shariq Khan 
