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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Morgan Stanley (XNYS:MS) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
MS
Name:
MORGAN STANLEY (XNYS:MS)
Sector:
- 413000.00K
Industry:
Capital Markets
CEO:
Mr. James Gorman
Total Employees:
78,000
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -111.94% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF MORGAN STANLEY(MS) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND CAPITAL MARKETS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
86.4
One Month Price Target:
$87.06
Six Month Price Target :
$90.36
Likely Price in One Year's Time:
Ticker:
$94.32
Likely Trading Range Today Under (Normal Volatility)
$86.12
Price Upper limit ($) :
$86.88
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$81.85
This week:
$76.23
This month :
$66.07
Other Primary facts
Market Cap:
146.15B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
1.72B
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
19.77%
-15.6%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$107.47
$97.67
$65.33
$75.13
Medium risk (<10%) entry points
Buy Call
Sell Call
$94.48
Buy Put:
Sell Put:
$92.38
$78.30
$80.42
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
MS
Sharpe Ratio:
4.06%
Comparison:
MS, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 16.29% higher than the industry
& ratio is 78.28% higher than the market/S&P 500 average
Average Returns/Yield of
MS
Daily returns:
0.12%
Weekly returns:
0.58%
Monthly returns:
2.30%
Yearly returns:
25.05%
Comparison of returns:
Average annual returns/yield (last 3 years) is 10.40% above industry average
Classification:
MS, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.83
Statistical test of Returns:
MS has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.62%
Weekly Volatility:
5.85%
Monthly Volatility:
11.71%
Yearly Volatility:
40.56%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.99%
Volatility in last five trading days has been -62.01% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.26%
Weekly VaR:
-11.77%
Monthly VaR:
-23.53%
How Much Can the price of
MS
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-19%
Worst case (decline):
-81.51%
This translates to price declining to:
$69.57
This translates to price declining to:
$15.97
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
MS is a 66.08% riskier investment compared to the market/S&P 500 & is 42.28% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -4.71% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
MS
Beta in relation to market/S&P 500--1.36
Expected beta in 1 year's time:
0.939
Expected beta in 3 year's time:
1.328
Unlevered (debt free) Beta:
0.498
Beta in relation to Nasdaq (XNAS):
0.957
Beta in relation to all global stocks::
1.038
Beta Comparison & Analysis
Beta of competitors/peers::
1.003
Beta is 35.94% higher than peers
Average Industry Beta:
1.144
Beta is 19.16% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
10.21%
Sustainable growth rate is -55.50% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.152
Alpha is 7.84% above industry average alpha yield
Alpha is 965% higher than market/& is unsustainably high
Analysis of Cost of Capital of
MS
Equity cost of capital:
0.125
Equity cost of capital is 13.67% above industry mean WACC
Unlevered (without debt) cost of capital:
4.56%
Before-tax cost of debt:
0.58%
After-tax cost of debt:
0.46%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
0.46%
WACC is 3.69% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$32.34
Revenue growth rate per share of (3Y):
1.43
Annual revenue growth rate is -37.75% below industry average
EPS:
$7.86
Expected Annual growth rate of EPS (3Y):
15.14%
Expected future EPS growth rate is -71.15% lower than the Capital Markets industry
Free cash flow (FCF) per share:
$2.80
Balance sheet equity growth per share: 71.31%
Equity growth rate per share is -28.72% lower than the industry
Debt per share
$134.38
EBITDA per share
$13.71
Valuation Analysis Today of
MS
P/E Ratio:
11.68
P/E Ratio of Competitors/Peers:
14.52
P/E ratio is -19.57% lower than main peers & is -41.58% lower than the industry
Stock price/value with industry average P/E ratio: $157.15
MS is -45.02% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
2.67
Price to sales ratio is -37.66% below the industry mean
P/B (Price to book value ratio):
1.43
Price to free cash flow: 30.86
Price to free cash flow ratio is -79.84% lower than the industry
Net income growth rate (3Y):
67.64%
Net income growth rate is -155.96% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 9.01%
Dividend yeild: 3.24%
Previous Dividend: $0.70
Previous adjusted dividend: $0.70
Previous Dividend: $2.80
Expected next dividend best case: $1.66
Expected next dividend worst case: -$0.26
Average dividend payment (long-term): $0.83
Average dividend increase/decrease (growth rate) % per period: 102.05%
Expected next dividend payment date: 08/11/2022
Expected next dividend record date: 28/07/2022
Expected next dividend declaration date: 13/07/2022
Previous dividend payment date: 13/05/2022
Previous dividend record date: 29/04/2022
Previous dividend declaration date: 14/04/2022
Dividend History:
2022-04-28--$0.70
2021-10-28--$0.70
2021-04-29--$0.35
2022-01-28--$0.70
2021-07-29--$0.70
2021-01-28--$0.35
Dividend growth rate is 243.80% higher than the average industry
In-depth Debt & Leverage Analysis
Debt to equity ratio:
224.20%
Net debt to equity ratio:
139.80%
Debt to assets ratio:
18.88%
Net debt to assets ratio:
11.77%
Debt-to-asset ratio is -74.55% below industry average
Ability to repay debt:
Interest coverage ratio:
16.93
Interest coverage ratio is -66.85% less than industry average
Looking forward:
Debt growth rate:
-100.00%
Annual debt growth is -554% lower than industry average debt growth rate
Debt repayment rate in last quarter: 4.59%
Analysis of Key Statistics
Correlation of price movement with the market:
0.795
Statistical significance of correlation:
MS has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.637
Stock price is 24.78% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.637
Correlation of price movement with Nasdaq (^IXIC):
0.006
Covariance of price movement with the market:
0.009
Kurtosis
12.583
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
0.623
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
MS
Gross Profit Margin Ratio:
-
Operating Profit Margin Ratio:
0.00%
-
Net Profit Margin Ratio:
-
Effective Tax Rate:
22.45%
Effective tax rate is 12.97% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
14.17%
Return on equity (ROE) is -41.85% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
1.19%
Return on assets (ROA) is -78.26% lower than the industry
Financial Leverage:
1.2x
Current Ratio:
0
-
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 11.5 years
Stock based compensation to net income ratio:
2.96%
In-depth Efficiency Analysis
Revenue generated per employee:
711.8K
Each employee generates -61% less revenue than industry average revenue per employee
EBITDA generated per employee:
301.9K
Each employee generates 7% more EBITDA than industry average revenue per employee
Profit generated per employee:
186.9K
Each employee generates 9% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 5.3K
Each employee generates -77% less free cash flow than industry average revenue per employee
Assets/Capital per employee
5.0M
Each employee generates -77% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
MS
THE CHARLES SCHWAB CORPORATION (XNYS:SCHW)
ROYAL BANK OF CANADA (XNYS:RY)
WELLS FARGO & COMPANY (XNYS:WFC)
BLACKROCK, INC. (XNYS:BLK)
AMERICAN EXPRESS COMPANY (XNYS:AXP)
HSBC HOLDINGS PLC (XNYS:HSBC)
THE GOLDMAN SACHS GROUP, INC. (XNYS:GS)
HDFC BANK LIMITED (XNYS:HDB)
-
Current Analyst Ratings
Strong buy�13%
Buy�58%
Hold�38%
Sell�0%
Strong sell�4%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
55.52B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
-
-
-
24.00B
24.67B
672.00M
-
-
9.62B
1.39B
3.33B
23.55B
-
14.58B
18.91B
4.25B
14.58B
Statement of Cash Flow
Date:
Period:
942.00M
Differed Income Tax :
-
Stock Based Compensation :
431.00M
Change in Working Capital :
- 4957000.00K
Accounts Receivables:
1.23B
Other Working Capital:
- 14290000.00K
Other Non-Cash Items:
108.00M
Net Cash Provided by Operating Activities:
239.00M
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
- 17459000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
94.77B
90.35B
185.13B
94.80B
-
-
-
4.00M
16.83B
8.24B
362.62B
-
-
387.70B
1609.93B
1222.23B
243.61B
7.92B
-
-
-
251.53B
230.70B
-
230.70B
1097.33B
1118.16B
20.00M
91.72B
- 4902000.0K
8.31B
March 31, 2022 at 6:00:00 AM
-
102.90B
1221.06B
452.98B
238.63B
143.9B
25.87B
- 8255000.00K
158.00M
- 11094000.00K
-
- 3681000.00K
- 1314000.00K
25.38B
9.29B
- 1327000.00K
8.36B
136.09B
127.73B
239.00M
- 652000.00K
- 413000.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
MS
2023
2024
2025
2026
2027
$118.24
$129.07
$140.90
$153.81
$167.90