Jason Goldberg of Barclays expects better-than-expected earnings from Morgan Stanley (NYSE: MS), which is scheduled to report its third quarter financial results on October
19.
Goldberg, who has an Equal-Weight rating and $32 price target on the stock, sees third-quarter EPS of $0.68, above the consensus
of $0.61.
“Compared with consensus, we believe our higher 3Q estimate primarily reflects a better FICC environment, as market conditions
appear to be better than some expected,” Goldberg wrote in a note.
That said, the analyst expects Morgan Stanley’s ROE to be in the 8 percent area as it still has work to do to get to its 9–11
percent 2017 target.
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Meanwhile, Goldberg says expense could be weighed in the second half due to the conditional CCAR approval for an increased
payout ratio.
“Relative to 2Q16, we expect lower revenues driven by seasonality in sales & trading and investment banking. Results in its
Investment Management and Wealth Management units are expected to be higher on generally improving market conditions,” Goldberg
highlighted.
According to Goldberg, the key items to watch on the print/call include:
- “Strategic Goals (update).”
- “Streamline ($1 billion expense reductions.”
- “FICC balance sheet ($120 billion RWA by 2017).”
- “Bank strategy/NII (NII benefits irrespective of rates).”
- “Capital (approval, resubmission).”
At the time of writing, shares of Morgan Stanley were down 0.89 percent to $32.27.
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Latest Ratings for MS
Date |
Firm |
Action |
From |
To |
Oct 2016 |
|
Maintains |
|
Neutral |
Oct 2016 |
|
Downgrades |
Buy |
Hold |
Oct 2016 |
|
Maintains |
|
Outperform |
View More Analyst Ratings for
MS
View the Latest Analyst Ratings
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