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Investing.com - Keefe, Bruyette & Woods raised its price target on Morgan Stanley (NYSE:MS) to $184.00 from $176.00 on Friday, while maintaining an Outperform rating on the stock.
The investment bank delivered what KBW described as an "exceptionally strong quarter" across its franchise, with momentum in investment banking, trading, and wealth management/investment management collectively driving a 23.7% return on tangible common equity (ROTCE).
Morgan Stanley stock rallied 5% following the quarterly results, a move KBW noted aligns with its earnings per share revisions for 2026 (+5%) and 2027 (+4%).
KBW’s revised model factors in approximately 20% ROTCE in 2026/2027 even with a building excess capital position at the bank.
The firm’s positive outlook on Morgan Stanley continues to be based on a structurally higher ROTCE and more durable business model, with emerging deregulatory benefits providing additional flexibility that KBW believes warrants a premium valuation.
In other recent news, Morgan Stanley reported a robust third-quarter performance, significantly surpassing market expectations. The company achieved earnings per share of $2.80, exceeding analyst consensus by 32%, while revenues outperformed estimates by 10%. Investment banking fees reached $2.1 billion, surpassing forecasts by 23%, with notable strength in equity and debt capital markets. Following these results, several financial firms adjusted their price targets for Morgan Stanley. Wells Fargo raised its price target to $177, maintaining an Equal Weight rating. Jefferies increased its target to $186, while also revising its 2026 earnings per share estimate upward by 6%. Evercore ISI set a new price target of $175, keeping an Outperform rating. Additionally, Citizens reiterated a Market Perform rating, noting strong performance across key metrics, including a 4% sequential growth in Global Wealth Management net interest income. UBS maintained a Neutral rating with a $165 price target after Morgan Stanley’s impressive third-quarter results.
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