Is Morgan Stanley stock a buy as shares rise after solid Q3 results?

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 Oct 14, 2021
  • Morgan Stanley shares edged higher more than 2% on Thursday morning after announcing its fiscal Q3 results.
  • The company reported its most recent quarterly results before markets opened, beating analyst expectations.
  • The MS stock trades at an attractive P/E ratio of 13.12.

On Thursday, Morgan Stanley (NYSE:MS) shares edged higher more than 2% after announcing its most recent quarterly results. The company reported its fiscal Q3 revenue and earnings before markets opened, beating analyst expectations.

The company posted FQ3 non-GAAP earnings per share of $2.04, beating the consensus Street expectation of $1.69. In addition, its GAAP EPS of $1.98 also outperformed the average for analyst estimates by $0.31, while revenue for the quarter grew by 26.1% Y/Y to $14.75 billion, $800 million ahead of expectations.

Morgan Stanley looks undervalued

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From an investment perspective, Morgan Stanley shares trade at a compelling P/E ratio of about 13.12, making the stock attractive to value investors. 

Moreover, analysts expect the company’s earnings to grow by more than 24% this year, before rising at an average annual rate of 6.42 over the next five years.

Therefore, growth investors could also find the stock exciting after Thursday’s Street-beating performance. 

Therefore, although the stock is up more than 47% this year and nearly 100% over the last 12 months, it may not be too late to invest in MS shares.

Source – TradingView

MS found support off the 100-day MA

Technically, Morgan Stanley shares seem to have recently bounced off the 100-day moving average to surge towards the trendline resistance. However, with shares still far from reaching the overbought conditions of the 14-day RSI, the current rebound appears poised to continue.

Therefore, investors could target extended gains at about $104.74, while $95.91 and $91.92 are crucial support zones.

It could be time to buy MS stock

In summary, although Morgan Stanley shares have rallied significantly this year, the stock still trades at attractive valuation multiples, making it a compelling option for investors. 

Moreover, MS shares are far from reaching overbought conditions after bouncing off the trendline support. As a result, investors could look to ride the current rally following the company’s solid Q3 performance. 

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