Morgan Stanley price prediction after smashing analyst expectations

By: Motiur Rahman
Motiur Rahman
Md Motiur enjoys researching how companies are solving challenges the world will face over the coming decades. In his… read more.
on Jul 15, 2021
  • Morgan Stanley reported its fiscal second-quarter results on Thursday before markets opened.
  • The company smashed analyst expectations on revenue and earnings, temporarily pushing the stock 2.88% higher.
  • However, MS shares pulled back later for a net intraday gain of about 0.43%. Is it time to buy?

Morgan Stanley (NYSE:MS) reported its fiscal second-quarter results on Thursday morning, beating analyst expectations on revenue and earnings. As a result, the MS stock price surged 2.88% before pulling back in later for a net intraday gain of just 0.43%.

Morgan Stanley’s non-GAAP EPS of 1.89 beat consensus Street estimate by $0.23, while the GAAP EPS of $1.85 outperformed by $0.20.

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The company reported annual revenue growth of 8.3% to $14.8 billion, beating analyst expectations by $810 million. Furthermore, Morgan Stanley also doubled its quarterly dividend to $0.70 per share up from $0.35 in the previous quarter. 

Is Morgan Stanley stock a buy in July 2021?

At the current price of about $92.63, Morgan Stanley stock is trading just shy of its all-time highs of $94.27 reached last month. Since November, MS stock price gained nearly 95% but still trades at an attractive P/E ratio of 12.14. However, its forward P/E is slightly higher at 13.08, suggesting slower earnings growth next year relative to this year.

Analysts expect MS EPS to grow by 24.60% this year and 2.11% next year. Therefore, it could be more profitable buying MS shares now and selling at the end of the year than investing long-term. 

Source – TradingView

Technical overview: my MS stock price prediction for Q3

Technically, Morgan Stanley shares appear to be trading in an ascending channel formation in the daily chart. It shows a significant bullish bias in the market sentiment. The bull run could continue further because the stock price is yet to hit overbought conditions.

Therefore, investors can target extended upward movements at approximately $100.16 once the stock price retests current all-time highs. Conversely, if the stock price falls below $85.59, it could confirm the end of the bull run.

Bottom line: Morgan Stanley shares seem poised to continue the upward movement

Although the MS stock price has surged significantly over the last eight months, it is yet to recover to overbought conditions after a recent pullback. Therefore, investors can still target bullish profits, at least in the short-term ahead of a potential retreat later. 

This year’s earnings growth expectation of nearly 25% makes MS an exciting short-term investment.

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