Multinational investment bank and financial services company Morgan Stanley’s (MS) shares jumped 2.5% and closed at $101.01 on Thursday after the company reported excellent financial results for the third quarter of 2021.
Earnings per share (EPS) stood at $1.98, higher than the $1.66 reported in the third quarter of 2020 and the Street’s estimate of $1.60.
Net revenues grew more than 25% year-over-year to $14.8 billion, exceeding analysts’ expectations of $13.66 billion. (See Insiders’ Hot Stocks on TipRanks)
Net revenues for the Institutional Securities segment totaled $7.5 billion compared to $6.1 billion reported a year ago. The increase was driven by a 67% rise in Investment Banking revenues and a 24% growth in Equity net revenues.
The Wealth Management segment’s net revenues jumped 28% year-over-year to $5.9 billion, while net revenues for the Investment Management segment climbed 38% to $1.5 billion.
Chairman and CEO of Morgan Stanley, James P. Gorman, said, “The firm delivered another very strong quarter, with robust revenues and improved efficiency producing an ROTCE of 20%. We had a standout performance of our integrated Investment Bank and record net new assets of $135 billion in Wealth Management.”
“Year-to-date, our successful integrations of E*TRADE and Eaton Vance have supported the growth of $400 billion in net new client assets across Wealth and Investment Management, bringing our total combined client assets to $6.2 trillion,” Gorman added.
After the release of the results, Jefferies analyst Daniel Fannon maintained a Buy rating on the stock with a price target of $119 (17.8% upside potential).
The analyst expects the company to report EPS of $1.88 in the fourth quarter.
Overall, the stock has a Moderate Buy consensus rating based on 7 Buys and 7 Holds. The average Morgan Stanley price target of $104.73 implies a 3.7% upside potential. Shares have gained nearly 96.8% over the past year.
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