Morgan Stanley (MS) has been impacted by a slowdown in IPOs and M&A activity, which has affected its investment banking segment. However, the company has diversified into asset and wealth management, which may stabilize earnings. The stock has recently traded at a discount, down 14% over the past month, presenting a potential buying opportunity.
Morgan Stanley's stock is trading at a reasonable valuation, with a P/E ratio slightly above its 10-year average, indicating it may be undervalued.
The S&P 500's recent correction suggests a potential buying opportunity, with Morgan Stanley's stock positioned for a rebound.
Based on the analysis, Morgan Stanley's stock is expected to rebound with a target price of $123.50. The recommendation is to BUY.
Year
MS Price Forecast($)
Potential Return(%)
2025
135.000
7.190
2026
520.000
290.650
2027
600.000
350.760
2028
600.000
350.760
2029
650.000
388.320
2030
750.000
463.440
Increases in asset prices can materially improve revenue and operating margins in the company's asset-management and wealth-management segments. There's also a sweet spot to the level of interest rates that can improve earnings.
The E-Trade and Eaton Vance acquisitions give Morgan Stanley exposure to some interesting tailwinds, such as employee stock administration plans, mass customization of asset management products, and self-directed brokerage.
Morgan Stanley arguably has billions of dollars in excess capital that it can use for acquisitions or return to shareholders.
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