The efficiency of Morgan Stanley’s MS buying and selling enterprise (constituting a good portion of its high line) is predicted to have been respectable in the fourth quarter of 2024, supported by elevated consumer exercise and market volatility. Thus, the corporate’s buying and selling numbers are prone to have supplied some assist to its quarterly outcomes, slated to be introduced earlier than the opening bell on Jan. 16.
Keep up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Within the to-be-reported quarter, the probability of continued respectable financial growth, cooling inflation and easing financial coverage drove consumer exercise. Additional, volatility was excessive in fairness markets however was respectable in different asset courses, together with commodities, bonds and overseas trade. Thus, Morgan Stanley is prone to have recorded sturdy progress in buying and selling revenues.
The Zacks Consensus Estimate for the corporate’s fairness buying and selling revenues is pegged at $2.38 billion, suggesting an increase of 8.2% from the prior-year quarter. The consensus estimate for fixed-income buying and selling revenues of $1.78 billion signifies year-over-year progress of 24%.
Our estimates for fourth-quarter fairness buying and selling revenues and fixed-income buying and selling revenues are $2.78 billion and $1.93 billion, respectively.
Different Components to Affect Morgan Stanley’s This fall Earnings
Funding Banking (IB) Revenue: Following the weak point in 2022 and 2023, world mergers and acquisitions (M&As) witnessed a marked enchancment within the fourth quarter of 2024. Each deal worth and quantity have been sturdy throughout the quarter, pushed by strong monetary efficiency, sturdy U.S. financial progress, buoyant markets and rate of interest cuts. Additional, the potential easing of regulatory oversight on M&As by the incoming Trump administration fueled deal-making actions. Nonetheless, lingering geopolitical points remained a priority. Additionally, Morgan Stanley’s place as one of many main gamers within the area is prone to have supported advisory charges within the quarter.
The Zacks Consensus Estimate for advisory charges is pegged at $593.2 million, suggesting a year-over-year fall of 15.5% on report charges earned final 12 months. Our estimate for a similar is pinned at $613.1 million.
Furthermore, the IPO market noticed indicators of cautious optimism pushed by market volatility and world financial easing. The spectacular fairness market efficiency drove some strong exercise in follow-up fairness issuances. Additional, bond issuance quantity was respectable on advantageous financial situations and company spreads at close to historic lows regardless of seasonally gradual volumes in December. Therefore, Morgan Stanley’s underwriting charges are anticipated to have elevated within the quarter.
The consensus estimate for fixed-income underwriting charges is pegged at $515.2 million, suggesting a 31.8% surge. The Zacks Consensus Estimate for fairness underwriting charges of $360.6 million signifies a bounce of 60.3%. The consensus estimate for whole underwriting charges of $875.8 million implies an increase of 42.2% from the year-ago quarter.
Our estimate for fixed-income underwriting charges is $586.4 million, whereas the identical for fairness underwriting charges is $395.4 million.
Thus, progress in whole IB revenue is prone to have been spectacular, pushed by the anticipated rise in underwriting revenues and advisory charges. The Zacks Consensus Estimate for IB revenue of $1.62 billion signifies a year-over-year rise of twenty-two.8%. Our estimate for IB revenue is pegged at $1.59 billion.
Web Curiosity Revenue (NII): The Federal Reserve lowered the rates of interest by 100 foundation factors since September 2024. That is anticipated to have supplied assist to Morgan Stanley’s NII progress prospects as funding/deposit prices step by step stabilize. Additional, the central financial institution signaled two extra price cuts this 12 months. Therefore, the general lending situation is prone to have improved.
The Zacks Consensus Estimate for NII is pegged at $2.09 billion, suggesting an increase of 10.1% on a year-over-year foundation. Our estimate for NII is $2.19 billion.
Bills: Value discount, which has lengthy been Morgan Stanley’s fundamental technique for remaining worthwhile, is unlikely to have supplied main assist within the December quarter. As the corporate has been investing in franchises, general prices are anticipated to have been elevated. Additionally, as the corporate is predicted to have recorded sturdy income progress, compensation associated to it might have risen.
We count on whole non-interest bills of $11.04 billion, implying a 2.2% year-over-year enhance.
What Our Quantitative Mannequin Predicts for MS
In accordance with our confirmed mannequin, the possibilities of Morgan Stanley beating the Zacks Consensus Estimate for earnings this time are excessive. It is because it has the suitable mixture of the 2 key elements — a constructive Earnings ESP and a Zacks Rank #3 (Maintain) or higher.
You possibly can uncover the most effective shares to purchase or promote earlier than they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for Morgan Stanley is +1.79%.
Zacks Rank: The corporate at the moment carries a Zacks Rank of three.
This fall Earnings & Gross sales Estimates of Morgan Stanley
The Zacks Consensus Estimate for the corporate’s earnings has been revised 1.3% north to $1.60 per share over the previous week. The estimate suggests a 41.6% rise from the year-ago reported quantity.
The consensus estimate for gross sales is pegged at $14.71 billion, which signifies a rise of 14.1%.
Morgan Stanley Value and EPS Shock
Morgan Stanley price-eps-surprise | Morgan Stanley Quote
Morgan Stanley’s Friends to Think about
Listed below are a few friends of Morgan Stanley that you could be need to take into account, as these have the suitable mixture of parts to submit an earnings beat of their upcoming releases, per our mannequin:
Goldman Sachs GS is scheduled to launch quarterly earnings on Jan. 15. The corporate has a Zacks Rank #3 and an Earnings ESP of +2.47% at current. You possibly can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Over the previous 30 days, the Zacks Consensus Estimate for GS’ quarterly earnings has moved virtually 1% decrease to $7.87.
The Earnings ESP for JPMorgan JPM is +1.95% and it carries a Zacks Rank #3 at current. The corporate is slated to report quarterly outcomes on Jan. 15.
JPM’s quarterly earnings estimates have been revised 4.7% north at $3.99 over the previous 30 days.
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The Goldman Sachs Group, Inc. (GS) : Free Stock Analysis Report
JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report
Morgan Stanley (MS) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the creator and don’t essentially replicate these of Nasdaq, Inc.
