On Friday, RBC Capital Markets adjusted their outlook on Morgan Stanley (NYSE:MS) shares, raising the price target from $122.00 to $142.00. The firm maintained a Sector Perform rating on the stock. The upgrade comes as Morgan Stanley’s stock trades near its 52-week high of $136.24, having delivered an impressive 66.75% return over the past year.
RBC Capital’s analyst pointed to Morgan Stanley’s robust fourth-quarter performance, highlighting the company’s stronger-than-expected net interest income and noninterest income, which were partially balanced by increased noninterest expenses.
Morgan Stanley’s fourth-quarter earnings per share (EPS) came in at $2.22, surpassing the consensus estimate of $1.70, which matched RBC Capital’s projection. The earnings beat was attributed primarily to the improved net interest income and noninterest income, despite the rise in noninterest expenses. With a current P/E ratio of 16.94 and strong financial metrics, InvestingPro analysis reveals 12 additional key insights about Morgan Stanley’s performance and valuation, available to subscribers.
The investment bank’s success was linked to its status as a premier global institution, having secured a growing share of the global institutional business wallet from its clients, contributing to high profitability levels. With a market capitalization of $218.25 billion and a consistent track record of raising dividends for 11 consecutive years, this performance has enabled Morgan Stanley to continue its trajectory as a leading player in the investment banking sector.
For deeper insights into Morgan Stanley’s financial health and growth prospects, InvestingPro subscribers can access comprehensive research reports and detailed financial metrics.
In response to the strong quarterly results, RBC Capital also revised their EPS estimates for the coming years. For 2025, the estimate was increased from $8.00 to $8.35, and for 2026, the forecast was adjusted from $9.00 to $9.20. These revised estimates reflect anticipated continued strength in noninterest income and net interest income, although tempered by the prospect of higher expenses.
The updated price target of $142 reflects RBC Capital’s revised expectations for Morgan Stanley’s financial performance, taking into account the factors that led to the fourth-quarter earnings beat and the bank’s strategic positioning in the global market.
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