Will Morgan Stanley (MS)’s Earnings Return To Winning Streak?

On April 21st, Morgan Stanley (NYSE:MS) will release its financial numbers for the three-month period January – March before the market opens. Four major banks have reported results for the March quarter so far. Most of them have some common factors like net interest margin getting squeezed on year-over-year basis and sequential basis. Nonetheless except one company, the other three major banks have either reported in line or above the Street estimations.

Other banks have posted increases in both Fixed Income and Equity Market activity along with inflows in Asset management that could bode well for Morgan Stanley.

Trend Indication

Given the fact that only one bank failed to meet the predictions, there is a good chance of Morgan Stanley (NYSE:MS) also joining the winning list. This meant reversing the trend from the previous quarter. One of the primary factors for the belief was that there were no negative factors to affect the estimated results.

The fourth quarter was a challenging one. However, the first quarter indicated significant improvement in the banking earnings so far. The advent of quantitative easing, stable American, seasonality, and the robust markets in the European Union should help the bank to post solid quarter, especially the investment bank, according to Susquehana analysts.

The analysts’ have also predicted Morgan Stanley (NYSE:MS) to have generated solid FICC revenue in the first quarter, which was the case with other banks too. The brokerage also lifted its EPS estimation for the bank to 78 cents a share for the first quarter from 71 cents a share. This was to reflect improved FICC fueled by rate, as well as, currency volatility.

Street Expectations

Street analysts’ expect the company to report earnings of 78 cents a share and $9.17 billion revenue. Last year, it delivered earnings of 68 cents a share and revenue of $8.80 billion. This meant that analysts’ are currently projecting EPS growth of 14.7% and revenue uptick of 4.2% in the first quarter.

Morgan Stanley (NYSE:MS)’s earnings for the fourth quarter missed estimations. The preceding three quarter earnings topped the Street expectations. Analysts’ expect the company’s earnings to reverse the trend in line with the other bank’s earnings.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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