Morgan Stanley (MS): A Bull Case Theory

Core Thesis - Morgan Stanley is positioned as a premier wealth management powerhouse, with significant growth in share price and strong financial performance [2][3][7] Financial Performance - The firm reported record full-year 2025 revenue of $70.6 billion, driven by net inflows of $100 billion in the last quarter and successful integration of E*Trade and Eaton Vance [3] - As of February 24th, Morgan Stanley's shares were trading at $168.79, with trailing and forward P/E ratios of 17.59 and 16.05 respectively [1] Institutional Confidence - A major institutional trade involved selling 10,000 June 18, 2026, $160 puts at $4.80 each, indicating a strong conviction in the stock's floor price [4] - The break-even point for this trade is at $155.20, which would require a significant macroeconomic shock given the firm's 21.6% ROTCE [4] Capital Return Programs - Morgan Stanley increased its quarterly dividend to $1.00 per share, yielding 2.2%, and reauthorized a $20 billion multi-year buyback program, providing structural support for the stock [5] - The ongoing Fed rate-cut cycle and increasing M&A activity suggest strong upside potential for the firm [5] Investment Opportunity - Selling the $160 puts presents an attractive opportunity for investors to acquire shares at a favorable price while benefiting from the company's earnings power and capital return policy [6]