What are the odds of Morgan Stanley to drop in July?

In the world of finance, it's often said that past performance is not indicative of future results. This adage rings particularly true when considering the potential for a decline in the value of Morgan Stanley's stock in July. As a titan in the financial services sector, specifically in capital markets, Morgan Stanley (MS.US) boasts a robust market capitalization of $155.2B and a healthy net income from continuing operations of $9.2B. However, with a current day typical price of $96.6, which is significantly higher than the analyst target price estimated value of $86.27, there may be a potential downside risk. The question remains: will the company's strong fundamentals, including a return on assets of 0.8% and a dividend yield of 3.56%, be enough to stave off a potential decline in the coming month? Currently, Morgan Stanley's Payout Ratio remains relatively stable compared to the previous year. The Capex to Operating Cash Flow is projected to increase to 0.11 in 2024, while the Ptb Ratio is expected to decrease to 1.46 in the same year. This article will evaluate Morgan Stanley, highlighting why it could be a promising year for its shareholders. It will also delve into key fundamental factors influencing Morgan Stanley's services and discuss their potential impact on investor outlook for the year.
Published over a month ago
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Reviewed by Michael Smolkin

Morgan Stanley's stock has shown a strong performance with a day typical price of $96.6 and an open price of $95.5. However, the company's high coefficient of variation of 771.75 and downside variance of 3.34 suggest a potential for increased risk and volatility, which could lead to a decline in stock value in July. Additionally, the firm's income tax expense of $2.6 billion could impact its net income, further pressuring the stock price. Despite these risks, the company's robust gross profit of $46.4 billion and return on assets of 0.008 indicate a strong financial position, which could help mitigate potential losses.

Important Takeaways

Morgan Stanley reported an annual revenue of $50.67 billion, with a net income of $9.23 billion and a gross profit of $46.44 billion. Corporate insiders own approximately 23.0% of the company's outstanding shares. The firm has a price-to-book ratio of 1.55, suggesting potential long-term market outperformance compared to companies with similar P/B ratios. The company's earnings per share (EPS) stands at 5.5. The last dividend was issued on April 29, 2024. Notably, Morgan Stanley executed a 2:1 stock split on January 27, 2000.
The performance of Morgan Stanley in the marketplace will significantly impact your decision to invest in its stock. Revenue growth, profitability, competitive positioning, management quality, and industry trends can influence Morgan Stanley's stock prices. When investing in Morgan Stanley, there are several factors to consider and potential outcomes to expect. As a company performs well, its stock price may increase, allowing investors to benefit from price appreciation. However, Morgan Stock can experience significant price fluctuations due to market conditions, economic factors, industry trends, or company-specific news. This is why investing in stocks such as Morgan Stanley carries risks, including the potential for capital loss. Stock prices can decline, and investors may incur losses if they sell shares at a lower price than their initial investment.

And What about dividends?

A dividend is the distribution of a portion of Morgan Stanley earnings, decided and managed by the company's board of directors and paid to a class of its shareholders. Note, announcements of dividend payouts are generally accompanied by a proportional increase or decrease in a company's stock price. Morgan Stanley dividend payments follow a chronological order of events, and the associated dates are important to determine the shareholders who qualify for receiving the dividend payment. Morgan one year expected dividend income is about USD2.43 per share.
At this time, Morgan Stanley's Dividends Paid is comparatively stable compared to the past year. Dividend Yield is likely to gain to 0.04 in 2024, despite the fact that Dividend Paid And Capex Coverage Ratio is likely to grow to (13.55).
Last ReportedProjected for Next Year
Dividends Paid5.8 B6.1 B
Dividend Yield 0.04  0.04 
Dividend Payout Ratio 0.63  0.67 
Dividend Paid And Capex Coverage Ratio(14.26)(13.55)
Investing in dividend-paying stocks, such as Morgan Stanley is one of the few strategies that are good for long-term investment. Ex-dividend dates are significant because investors in Morgan Stanley must own a stock before its ex-dividend date to receive its next dividend.
This type of analysis is very useful when you want to generate a past dividend schedule and payout information for Morgan Stanley. Then that information in the form of graph and calendar can be used to fully explain how Du Pont dividends can provide a real clue to its valuation.

How important is Morgan Stanley's Liquidity

Morgan Stanley financial leverage refers to using borrowed capital as a funding source to finance Morgan Stanley ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Morgan Stanley financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Morgan Stanley's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Morgan Stanley's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Morgan Stanley's total debt and its cash.

What do experts say about Morgan?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions.
Analysis Consensus

Another Deeper Perspective

Over half of Morgan Stanley's outstanding shares are owned by institutional investors. These institutional investors are typically referred to as corporate investors that shop for positions in a given instrument to benefit from reduced trade commissions. Please note that on April 5, 2024, Representative Ro Khanna of US Congress acquired $15k to $50k worth of Morgan Stanley's common stock.

Ownership Breakdown

Retail Investors
15.68%
Insiders
23.3%
Institutions
61.02%
Retail Investors15.68
Insiders23.3
Institutions61.02
"As the saying goes, 'past performance is not indicative of future results,' and this could be the case for Morgan Stanley's stock value as we move into July.
Despite a solid current ratio of 2.00X and a five-year return of 2.52%, the investment bank's high beta of 1.37 suggests a higher volatility compared to the market. This, coupled with a downside deviation of 1.83, indicates a potential risk of decline in stock value. Moreover, the firm's high total debt of $276.39B could exert further pressure on the stock. However, a Wall Street target price of $99.05 suggests some optimism among analysts, underscoring the complexity of predicting market movements.".

Some Morgan technical indicators suggest correction

Morgan Stanley's latest expected shortfall indicator has fallen to -1.12, hinting at potential risk in the stock's performance and a possible correction phase. While some investors may interpret this as a warning, others could see it as a chance for price appreciation. However, it's vital to consider other financial and market indicators before making investment decisions. Morgan Stanley's stock exhibits relatively low volatility, with a skewness of -0.47 and kurtosis of 1.51. Understanding market volatility trends can help investors time their market moves.
The use of volatility indicators allows traders to gauge Morgan Stanley's stock risk against market volatility in both bullish and bearish trends. The heightened volatility of bear markets can directly affect Morgan Stanley's stock price and stress investors, often prompting portfolio rebalancing with diverse financial instruments as prices drop.In light of the current market conditions and analyst projections, it may not be the best time to exit Morgan Stanley. The stock's possible downside price of $92.36 is still higher than the valuation real value of $81.57, indicating a potential for growth. Furthermore, the analyst overall consensus is a 'Buy', with 5 strong buys and 3 buys against 16 holds. The highest estimated target price stands at $95.76, suggesting a potential upside. Therefore, investors might want to hold on to Morgan Stanley for a while longer and monitor the market trends closely..

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Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of Morgan Stanley. Please refer to our Terms of Use for any information regarding our disclosure principles.

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