Morgan Stanley(US:MS) ZACKS·2025-11-26 16:05Core Viewpoint - Morgan Stanley's shares have increased by 31.6% year-to-date, outperforming the industry, Zacks Finance sector, and S&P 500, although it has underperformed compared to Goldman Sachs [1] Group 1: M&A Activity and Market Position - Bullish investor sentiment towards Morgan Stanley is largely driven by a rebound in global mergers and acquisitions (M&A), with significant deal-making activity observed in Q3 2025 [5] - The company's focus on wealth and asset management has reduced its reliance on capital markets for income generation, with acquisitions like Eaton Vance, E*Trade Financial, and Shareworks enhancing its diversification efforts [7][8] - The Wealth Management segment's total client assets have seen a five-year CAGR of 18.1%, while the Investment Management segment's total assets under management have a CAGR of 24.7% [9] Group 2: Financial Performance and Strategic Collaborations - Morgan Stanley's Asia region revenues increased by 29% year-over-year to $7.27 billion in the first nine months of 2025, supported by strong client activity [12] - The company has a robust balance sheet with long-term debt of $324.1 billion and average liquidity resources of $368.1 billion as of September 30, 2025 [13] - Following the 2025 stress test, Morgan Stanley announced an 8% increase in its quarterly dividend to $1.00 per share and reauthorized a share repurchase program of up to $20 billion [14][15] Group 3: Analyst Estimates and Valuation - The Zacks Consensus Estimate for Morgan Stanley's earnings in 2025 and 2026 has been revised upward to $9.76 and $10.32, implying year-over-year growth of 22.8% and 5.8%, respectively [16][18] - Morgan Stanley's stock is currently trading at a forward P/E of 16.11X, which is above the industry's 14.09X and higher than peers like JPMorgan and Goldman Sachs [19][22] - The company's return on equity (ROE) stands at 16.4%, outperforming the industry's ROE of 12.51% [23]