UBS maintains Morgan Stanley stock neutral with $120 target

On Monday, UBS analyst Erika Najarian maintained a Neutral rating on Morgan Stanley (NYSE:MS) with a steady price target of $120.00. The financial giant, currently valued at $178.7 billion and trading at an attractive P/E ratio of 12.8, reported a robust quarter, with core earnings per share (EPS) of $2.56, which excluded severance charges and tax benefits. This figure surpassed both the average Wall Street estimate of $2.21 and UBS’s own projection of $2.06.According to InvestingPro, Morgan Stanley shows strong potential with multiple positive indicators. Subscribers can access 8+ additional exclusive insights about MS’s valuation and growth prospects.

Morgan Stanley’s Institutional Securities business mirrored the momentum seen in JPMorgan Chase (NYSE:JPM) & Co.’s report earlier on Monday. The firm’s total sales and trading revenue reached $7.4 billion, exceeding consensus expectations by 21% and marking a 33% year-over-year increase. A notable highlight was the equities revenue, which soared by 45% year-over-year to $4.1 billion. Fixed Income, Currencies, and Commodities (FICC) trading also saw growth, with revenue of $2.6 billion, a 5% increase from the previous year.

Investment banking revenues were also strong at $1.56 billion, 6% higher than what analysts had anticipated. This success was attributed to the strength in Debt Capital Markets (DCM), which helped offset softer advisory and Equity Capital Markets (ECM) results compared to expectations.

In the Wealth Management sector, Morgan Stanley reported revenues of $7.3 billion, aligning with forecasts. However, net new assets amounted to $94 billion, surpassing Street expectations by 10%. Najarian noted that capital markets names have faced challenges recently, but believed that Morgan Stanley’s solid results and strong support from long-only investors should contribute to the stock’s outperformance.

The analyst also suggested that the positive earnings report from Morgan Stanley, along with JPMorgan’s results, could set high expectations for other financial institutions such as Goldman Sachs (GS), Citigroup (NYSE:C), and Bank of America (BAC) in the following week.

In other recent news, Morgan Stanley reported impressive financial results for the first quarter of 2025, surpassing analyst expectations with earnings per share (EPS) of $2.60, exceeding the forecast of $2.26. The company’s revenue also outperformed predictions, reaching $17.7 billion, which was $940 million above the forecasted amount. This strong performance was primarily driven by a record-breaking quarter in Sales & Trading revenues and notable growth in equity revenues, which increased by 45% year-over-year. Despite the positive financial results, JMP analysts maintained a Market Perform rating on Morgan Stanley, citing the firm’s ability to capitalize on market volatility. Additionally, Morgan Stanley’s Return on Tangible Common Equity stood at a robust 23%, reflecting the company’s strong financial health. The firm continues to invest heavily in technology and innovation, particularly in its ETRADE platform and wealth management services. In terms of cost management, Morgan Stanley’s expenses aligned closely with expectations, with a slightly lower compensation ratio of 42.4% compared to the estimated 42.8%.

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