CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
MS results highlight doldrums in the capital markets with lower market volatility and less risk-taking by investors. We lower our target price by $6 to $90 on forward P/E of 12.7x, which reflects a hybrid valuation of part investment bank and part asset/wealth management firm. We keep our 2023 EPS at $5.90 and 2024’s at $7.10. MS posted Q3 2023 EPS of $1.39, a $0.07 consensus beat. Wealth Management unit realized -4% revenue decline Y/Y (48% of Q3 2023 revenue), with Investment Management +14% (10%) and Institutional Securities -3% (42%). Investment banking realized lower M&A fees (-1% Y/Y), debt underwriting -36% due to lower event-driven high-yield activity and muted equity underwriting +5%. Equity trading was -2% and FICC +13%. America’s revenue was -1% Y/Y (77% of total), EMEA -1% (11%), and Asia -2% (12%). MS has a $20.0B buyback plan. The bank repurchased $4.0B in the first nine months of 2023 and increased the dividend by 7.5 cents to $0.85, effective August 15. The ROE CET 1 ratio was 16.1% in Q3 2023.