Key Takeaways:
- MS shares surged 4.8% to a record close on July 14
- Market capitalization reached $366 billion as the stock bucked a broader selloff
- Q2 earnings due July 15 with consensus EPS of $2.89
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Morgan Stanley jumps 4.8% to all-time high, market cap reaches $366B
Morgan Stanley shares surged 4.8% to an all-time high on July 14, pushing market capitalization to $366 billion as the bank bucked a broader market selloff.
"The migration has significantly contributed to more than $1 trillion in total assets within our adviser-led strategy," Sharon Yeshaya, chief financial officer at Morgan Stanley, said on the Q1 earnings call.
The rally pushed the stock past the $207.62 consensus analyst price target, leaving it trading at 19 times trailing earnings. The gain came even as the S&P 500 fell 0.8% to 7,515.34 and the Nasdaq Composite dropped 1.6% to 25,873.18 after President Donald Trump reinstated a blockade on Iranian shipping through the Strait of Hormuz, sending oil prices up more than 9%.
The record valuation raises the bar for Morgan Stanley's Q2 earnings report due July 15, where analysts expect earnings per share of $2.89, up 36% from a year earlier. Any miss could trigger a sharp re-rating given the stock now trades above the average analyst price target.
Morgan Stanley's first-quarter results set the stage for the rally. The bank reported earnings per share of $3.43, beating the $3.02 consensus, while revenue rose 16% to $20.58 billion. Wealth management client assets reached $7.34 trillion, with $1.2 trillion of adviser-led assets sourced from workplace and E*TRADE channels — roughly 20% of the $5.8 trillion adviser-led book.
The stock has gained 53% over the past year and 27% year to date, outpacing the broader financial sector. JPMorgan Chase, by comparison, has risen 19% over the same period, while Bank of America has gained 31%. At a price-to-book ratio of 3.4, Morgan Stanley trades at a premium to both JPMorgan at 2.1 and Bank of America at 1.5.
The broader market declined Monday as geopolitical risk resurfaced. The Dow Jones Industrial Average fell 138 points, or 0.3%, to 52,498.64. West Texas Intermediate crude jumped 9.4% to above $78 a barrel, while Brent crude rose 9.6% to above $83.
This article is for informational purposes only and does not constitute investment advice.
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