Morgan Stanley Analysts Optimistic After Q3: Fed Rate Declines 'Should Drive Robust Growth' In Asset Management

Morgan Stanley MS stock received price target increases from analysts after beating Street estimates and showing strength across multiple company segments in third-quarter financial results.

The Morgan Stanley Analysts:

• Barclays analyst Jason Goldberg maintained an Overweight rating and raised the price target from $121 to $135.
• Bank of America analyst Ebrahim Poonawala reiterated a Buy rating and raised the price target from $120 to $135.

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Barclays on Morgan Stanley: The financial services and investment bank saw markets, investment banking, wealth management and investment management all exceed forecasts, Goldberg said in a new investor note.

The analyst highlighted company commentary that said pipelines were "healthy and diverse."  

"Corporate activity is showing momentum, while sponsors desire to transact is ‘steadily materializing,'" Goldberg said.

The analyst noted strong growth in both wealth management and investment management compared to the second quarter.

"Reflecting 3Q24's strength and revenue momentum heading into 4Q24, we are raising our 2024 EPS estimate by $0.45 to $7.40."

The analyst raised the stock price target and several financial metrics, noting a "more constructive capital markets backdrop and increased confidence in a soft landing."

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Bank of America on Morgan Stanley: Third quarter results from Morgan Stanley show the stock is "ready to reacquire the lost valuation premium," and that "the funnel is flowing," Poonawala said in a new investor note.

"We expect stock valuation to continue to re-rate higher ahead of a positive EPS revision cycle and improving profitability," Poonawala said.

The analyst said the year-to-date results could indicate that new CEO Ted Pick has the "ability to deliver on targets."

"Stronger than expected 3Q24 results bolter our thesis as these should provide the Street increased confidence that continued investments in a hard to replicate wealth franchise combined with declining interest rates should drive robust growth in asset management."

Morgan Stanley is showing durable revenues, strong risk management and a gain from secular themes like the generational wealth transfer in the United States, the analyst added.  

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