On Friday, Jefferies analyst Daniel Fannon updated the firm’s outlook on Morgan Stanley (NYSE:MS) shares, raising the price target to $151 from $144, while reaffirming a Buy rating on the stock. The company, currently trading at $135.81 and commanding a market capitalization of $218.25 billion, has seen impressive momentum with a 66.75% return over the past year.
According to InvestingPro data, eight analysts have recently revised their earnings upward for the upcoming period. The adjustment followed Morgan Stanley’s fourth-quarter results, which prompted the analyst to revise the earnings per share (EPS) estimates for the years 2025 and 2026 upwards by 2% to $8.30 and $9.15, respectively, from the prior estimates of $8.15 and $9.00.
The revised EPS forecasts are a direct result of the robust performance of Morgan Stanley’s Institutional Securities Group (ISG), which reported strong results, and the firm’s ability to leverage positive operating dynamics. The company’s financial strength is evident in its 14.71% revenue growth and healthy 2.72% dividend yield, supported by an 11-year streak of consecutive dividend increases.
InvestingPro subscribers can access dozens more insights about Morgan Stanley’s financial health and growth prospects through the comprehensive Pro Research Report. Fannon cited the highest merger and acquisition (M&A) backlog in seven years within the ISG and stable-to-growing deposit levels in wealth management as key factors contributing to the firm’s momentum exiting the fourth quarter of 2024.
The analyst’s commentary highlighted the expectation that these strengths will continue to drive improved returns for Morgan Stanley. The positive revisions reflect the flow-through of the day’s impressive ISG results and the anticipated benefits of positive operating leverage.
Morgan Stanley’s strong finish to the year, with significant activity in its ISG and a solid performance in wealth management, sets a favorable stage for the company’s future performance. Trading near its 52-week high of $136.24, the stock currently carries a P/E ratio of 16.42.
The increased price target from Jefferies signals confidence in Morgan Stanley’s ability to sustain this momentum and deliver on the revised earnings expectations, though InvestingPro analysis suggests the stock is currently trading slightly above its Fair Value.
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