Jim Cramer buys Morgan Stanley stock on post-earnings pullback

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on Oct 18, 2023
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  • Morgan Stanley reported its financial results for the third quarter on Wednesday.
  • Shares of the multinational investment bank are down about 8.0% at writing.
  • Jim Cramer explains why he bought Morgan Stanley stock this morning.

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Morgan Stanley (NYSE: MS) losing 8.0% today despite beating Street estimates for its third financial quarter is an opportunity to buy a quality name at a discount, says the famed investor Jim Cramer.

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Here’s why Jim Cramer is bullish on Morgan Stanley stock

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Cramer dubbed the sell-off in “MS” on Wednesday an over reaction considering the weakness in its investment-banking division was broadly expected as both M&A and the IPO market hasn’t been particularly exciting in recent months.

But the Chief Executive expects that business to return with a boom as soon as the Federal Reserve signals the end of its rate-hike cycle – which paints a rosy picture of what the future holds for Morgan Stanley, as per Jim Cramer.

The Mad Money host also touted the Morgan Stanley stock this morning as it pays a rather lucrative dividend yield of 4.6%.

You can read the bank’s full earnings release here.

Cramer says Morgan Stanley is the best in wealth management

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Investors were spooked on Wednesday also because Morgan Stanley saw weakness in wealth management as well. But Jim Cramer argues that it’s the best wealth-management business in the entire industry and will swiftly recover in the coming quarters.

Morgan Stanley added only $36 billion worth of net new assets in Q3 versus $200 billion in the prior two quarters combined – making investors fear that the management will fail to deliver on its goal of bringing in $1.0 trillion of net new assets every three years.

Still, the Mad Money host is convinced that it’s too soon to make that call especially since the bank has already added $235 billion worth of assets in three quarters and is well on track to reach its target.

Cramer loaded up on another 75 shares of Morgan Stanley on the pullback today. In total, his Charitable Trust now owns 1,475 shares of the multinational financial services behemoth that launched an AI assistant last month as Invezz reported here.

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