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Morgan Stanley MS

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Morningstar’s Analysis

Valuation
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Stewardship

PREMIUM

Increasing Morgan Stanley Fair Value Estimate to $56 After Recovery in Client Assets

Michael Wong, CFA, CPA Sector Director

Analyst Note

| Michael Wong, CFA, CPA |

We are increasing our fair value estimate for narrow-moat Morgan Stanley to $56 per share from $49. This implies a forward price/earnings ratio of 11 times and a price/tangible book ratio of 1.3 times. Of the net $7 increase in our fair value estimate, $1.50 was a result of earnings since our previous valuation update. The remaining $5.50 increase is primarily from the strong recovery in client assets over the previous several months and projecting that earnings will hold up better in this recession than in our prior forecast. We assess that shares are currently fairly valued to modestly undervalued.

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Company Profile

Business Description

Morgan Stanley is a global investment bank whose history, through its legacy firms, can be traced back to 1924. The company has institutional securities, wealth management, and asset management segments. The company had $2.7 trillion of client assets as well as more than 60,000 employees at the end of 2019. Approximately half of the company's net revenue is from its institutional securities business, with the other half coming from wealth and asset management. The company derives about 30% of its total revenue outside the Americas.

Contact
1585 Broadway
New York, NY, 10036
T +1 212 761-4000
Sector Financial Services
Industry Capital Markets
Most Recent Earnings Jun 30, 2020
Fiscal Year End Dec 31, 2020
Stock Type High Yield
Employees 61,596

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