Morgan Stanley ($MS) is a Good Price & Good Company no ?
This will be my 7th post to Tiger_chat 's question of whether an investor profits from a good company or a good price ?
To that I have asked, "why not both" ?
Wouldn't that have more upside comparatively speaking ?
Back to bank stock again. Hee hee.
Today we have for you - $Morgan Stanley(MS)$ , its Q4 2022 earnings and see if it fits the bill.
Sidetrack: I have covered (1) an investment management company, (2) a healthcare company and (3) 5 financial institutions; to test out this theory.
- BlackRock Inc - interested ? Click here to read it. Like the post ok. Tks.
- UnitedHealth Grp - interested? Click here to read. Like the post ok. Tks.
- Citigroup - interested ? Click here to read. Like the post ok. Tks.
- JP Morgan - interested ? Click here to read. Like the post ok. Tks.
- $Bank of America(BAC)$ - interested ? Click here to read. Like the post ok. Tks.
- Wells Fargo Inc - interested ? Click here to read. Like the post ok. Tks.
- Jefferies Financial Group - interested ? Click here to read. "Like" the post ok. Tks.
- An American multinational investment management & financial services company
- Founded on 16 Sep 1935, in response to the Glass–Steagall Act, that required splitting of American commercial & investment banking businesses
- Formed by Henry Sturgis Morgan (a grandson of JP Morgan), Harold Stanley and others
- It is one of big 4 investment banks in the US ... according to Investopedia
- It ranked #61 in Fortune 500 (2022) list of companies.
- With offices in 41 countries, its worldwide clientele including corporations, governments, institutions & individuals.
- It is considered systemically important by the Financial Stability Board (FSB).
- Its main areas of business are (a) institutional securities, (b) wealth management & (c) investment management.
- It grew into its size thru strategic merger and acquisition; with the most notable in 5 Feb 1997 with Dean Witter Discover & Co., the spun-off financial services business of retailer - Sears Roebuck.
- In 2001, it changed its name back to "Morgan Stanley" from "Morgan Stanley Dean Witter Discover & Co" - a mouthful isn't it.. LOL!
In 2022, a year where US market has been hammered by extremely volatility - how did Morgan Stanley fare ?.
Current stock price > 19 Jan 2022 stock price by 1.41%. Wow !
Morgan Stanley - Summary
- Net revenue came in at $12.75 Billion vs $14.52 Billion (Q4 2021); its -12.19% lower QoQ.
- Net income fell to $2.2 Billion vs $3.7 Billion (Q4 2021); its -40.5% lower QoQ.
- Earnings per diluted share fell to $1.26 vs $2.01 (Q4 2021); its -37.31% lower QoQ.
Morgan Stanley - Business segments and its revenue income
- There is a common observation across US banks in that their respective Investment Management arm/segment all fared "poorly" last year when Covid was still at its height.
- There was hardly any IPO last year. Most under-writing activities have sorta "dried up". Similarly for Debt and equity issuance.
- Institutional Securities net revenue for Q4 2022 was $4.8 Billion vs $6.7 Billion (Q4 2021); a fall of -28.36% (QoQ).
- Wealth Management net revenue for Q4 2022 was $6.6 Billion vs $6.3 Billion (Q4 2021); a gain of +4.76% (QoQ).
- Investment Management net revenue for Q4 2022 was $1.5 Billion vs $1.8 Billion (Q4 2021); a fall of -16.67% (QoQ).
Morgan Stanley - Other information
- All US banks have amped up respectively their "provisions for credit losses".
- JP Morgan has upped it by +49% to $2.28 Billion.
- Bank of America has increased provision to $1.10 Billion.
- Citibank has increased provision to $1.8 Billion.
- Morgan Stanley has set aside $87 Million for credit losses provision; no exceptions.
Morgan Stanley's CEO on Q4 2022 Results :
Wealth Management provided stability with record revenues and over $310 Billion in net new assets. Investment Management has benefitted from diversification and within Institutional Securities, our Equity & Fixed Income revenues were strong, offset by Investment Banking. Our strong capital position allowed us to repurchase $10 Billion of shares this year and we distributed a healthy dividend... James Gorman, CEO, Morgan Stanley.
Why Morgan Stanley is Both A Good Price and Good Company ?
- Banking stocks are non-cyclical in nature unlike semiconductors, construction, retail etc..
- With interest rates forecasted to continue rising to the 5% terminal rate banding means more revenue "potentially" to be earned by US financial institutions
- With a generous annual dividend of $3.10 per share (3.19% to current stock price), what is there not to like. Meta Inc.(META) - No dividends. Tesla Motors (TSLA) -No dividends.
- Comparing its current stock price and 19 Jan 2022 stock price, there's profit made (+1.41%) even when US market was overall down 21% for S&P 500 and -33% for Nasdaq; whatmore could an investor asks for ?
- What do you think of Morgan Stanley's Q4 2022 performance compared to other banks ?
- Should the market sentiments improve in H2 2023; do you see Morgan Stanley's stock price rising further ?
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