How are energy investors positioned?
Citi raised its price target on Morgan Stanley (NYSE:MS) stock to $130.00 from $125.00 on Wednesday, while maintaining a Neutral rating on the investment bank. According to InvestingPro data, Morgan Stanley currently trades at $130.09, with analysis suggesting the stock is fairly valued based on its Fair Value model.
The price target increase follows management updates at a recent conference where Morgan Stanley executives made optimistic remarks about a rebound in capital markets activity, according to Citi analyst Keith Horowitz.
Morgan Stanley’s wealth management business continues to serve as the "steady engine" of the firm, with investor attention likely to focus on net new assets in this segment, the research note indicated.
Investor sentiment toward Morgan Stanley has become more bullish since first-quarter earnings, particularly following market volatility on what Citi termed "Liberation Day," as markets gained confidence in a potential capital markets recovery.
While Citi acknowledges Morgan Stanley remains a "high quality franchise" trading at a premium of approximately 2.9 times tangible book value, the firm sees "limited near-term upside" due to high expectations already reflected in the stock price and "little skepticism embedded in the stock."
In other recent news, Morgan Stanley has been active with significant developments. Erste Group upgraded Morgan Stanley’s stock rating from Hold to Buy, citing the company’s consistent positive earnings surprises and a strong return on equity compared to its peers. Despite projected lower revenue growth for 2025, analysts expect a substantial increase in earnings per share, highlighting Morgan Stanley’s competitive advantage in the financial sector. Additionally, Morgan Stanley Infrastructure Partners announced the sale of its stake in Seven Seas Water Group to the EQT (ST:EQTAB) Infrastructure VI fund. Although the transaction details were not disclosed, this move reflects Morgan Stanley’s strategy to focus on high-value infrastructure assets.
In other developments, Morgan Stanley is leading a $5 billion debt raise for Elon Musk’s xAI, despite facing weak investor demand. This financing includes a mix of floating-rate and fixed-rate loans, as well as secured bonds. Meanwhile, Morgan Stanley is also involved in Brookfield Asset Management (TSX:BAM)’s plan to secure $3 billion in debt financing for its acquisition of Colonial Enterprises, the operator of the Colonial Pipeline. Lastly, Morgan Stanley announced the appointment of Lynn Good, former CEO of Duke Energy (NYSE:DUK), to its Board of Directors, effective July 18, 2025.
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