Morgan Stanley Stock (MS): Is It A Good Buy? (2024)

By Scott Jeffries

December 28, 2021

Morgan Stanley, a global financial services company, provides investment banking services and products to its customers. The company also has a dividend stock, called the Morgan Stanley stock. The firm’s services cater to corporations, financial institutions, governments and individuals. The company also has several business segments, including wealth management, institutional securities and investment management.

Morgan Stanley Services and Offerings

While the institutional services segment offers capital-raising services, financing services, and financial advisory, the wealth management segment provides investment advisory and brokerage services for different investments. These include precious metals, fixed-income securities, futures, equities, options, unit investment results, mutual funds, structured products, mutual fund asset allocation programs, separately managed accounts and managed futures.

The investment management segment offers clients and customers real estate, merchant banking, fixed income and equity strategies. Founded in 1935, the company is still going strong and is one of the most attractive contenders in the market.

As evident, the company plays a huge role in the financial service provision industry. Does that make the Morgan Stanley stock worth an investment? Here are the details.

Morgan Stanley Stock Current Price

As of Dec. 28, 2021, Morgan Stanley stock is trading at $99.97, with a 0.43% decrease in price in the past 24 hours. The stock has a market cap of $179.387 billion.

Is Morgan Stanley Stock a Buy?

One of the best ways to determine if a stock is worth investing in is by checking the financial ratios and metrics. Here are some Morgan Stanley stock metrics.

MS Stock Price-to-Earnings Ratio

The P/E ratio is the ratio for determining the value of a company that measures its share price in relation to its earnings per share. The metric is also called earnings multiple or price multiple. Analysts and investors use P/E ratios to determine the relative value of an organization’s shares. The metric can also be used to compare how well a company is doing against its historical records.

The P/E ratio shows how much investors are willing to pay for every dollar of earnings a stock gives. It can be used to compare the stock’s performance with how it was in the past and how it compares to the average ratio in the industry.

Morgan Stanley’s PE ratio is 12.77. On average, the P/E ratio for S&P 500 is about 30.15. Morgan Stanley’s P/E level indicates that the stock is undervalued as compared to its competitors. Thus, it’s a good time to invest in the stock right now. On top of that, Morgan Stanley’s forward PE ratio, the price relative to the earnings of 2021, is higher than the company’s current P/E ratio.

Keeping this in mind, investors can expect the company’s share price to increase in the future.

MS Stock Price-to-Sales Ratio

The P/S ratio compares the current price of a stock to its total sales. A lower score is better. Some investors value this metric more than others as it considers sales. Since it’s hard to manipulate sales with accounting tricks, the P/S ratio is a reliable metric to determine a company’s performance.

Morgan Stanley has a P/S ratio of 3.307 as of Dec. 28, 2021. Since it’s lower than the market average, the figure indicates undervalued trading in comparison with the historical norms.

Brand Value Score

Morgan Stanley’s current brand value score is A, which puts it among the year’s top stocks. The high rating makes the stock a good investment for value investors.

MS Stock Price-to-Cash-Flow Ratio

The P/CF ratio is another indicator of a stock’s value since it measures a stock’s value relative to its operating cash flow per share. Morgan Stanley stock’s P/CF ratio is 10.94, which is better than 11.78, the industry average.

Judging from all these factors, Morgan Stanley stock is a solid investment and will potentially yield results for value investors.

Why Invest in Morgan Stanley Stock?

Apart from the impressive metrics and financial ratios, some other reasons make Morgan Stanleystock a good buy.

Revenue Growth

The company’s organic growth is very impressive and is expected to follow the same trend in the future too. Certain factors, including trading activities, improvements in corporate lending, and strategic buyouts, are boosting the company’s revenues.

Capital Deployment

During the pandemic, the U.S. Federal Reserve restricted share repurchases and dividends by major banks, including Bank of America, JPMorgan Chase, and Goldman Sachs, to conserve liquidity.

Morgan Stanley did not repurchase any shares in 2020. But now that the Federal Reserve has approved the decision, the company will repurchase shares in 2021 and double its dividend at 70 cents per share. Since Morgan Stanley has a notable earnings strength and liquidity position, the company is expected to enhance shareholder value by deploying capital efficiently in the coming years.

Strong Earnings

Compared to the industry average, Morgan Stanley’s earnings have increased substantially in the past few years. Analysts expect the company’s earnings to grow by 11.1% in 2022.

Additionally, in the majority of the financial quarters, Morgan Stanley’s earnings in the past have been more than forecasted by the Zacks Consensus Estimate.

Final Take

In light of the financial metricsand Morgan Stanley’s standing in the industry, the company’s stock is worth an investment. Additionally, Morgan Stanley has a strong balance sheet that creates a positive investor sentiment about the company’s stock.

The bank also has big plansfor 2022, which will positively influence the price of Morgan Stanley stocks.

Good To Know

Although financial ratios are a good indicator of a stock’s valuation, there are times when they need to be adjusted. This leads many investors to use normalized financials to better analyze a company’s growth rate and earnings power. Therefore, along with checking the financial ratios and key metrics, you should also keep up with the news about the organizations whose stocks you want to buy or have invested in.

Information is accurate as of Dec. 28, 2021.