May 25, 2023
Top 10 Stock Morgan Stanley Sell Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Morgan Stanley – Top 10 Stock in Dow Jones U.S. Investment Services Index
Morgan Stanley is listed as a top 10 stock on May 25, 2023 in the market index D.J. US Investing because of its high performance in at least one of the Obermatt investment strategies. While only half of the consolidated Obermatt Ranks exhibit above-average performance and professional market sentiment is positive, it may be a solid investment proposition, especially if a growth recovery is to be expected soon. Based on the Obermatt 360° View of 22 (22% performer), Obermatt issues an overall sell recommendation for Morgan Stanley on May 25, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Investment Banking & Brokerage |
| Index | Dividends USA, Employee Health US, D.J. US Investing, S&P 500 |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° Assessment Morgan Stanley Sell
| 360 METRICS | May 25, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 72 |
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| GROWTH | ||||||||
| GROWTH | 21 |
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| SAFETY | ||||||||
| SAFETY | 24 |
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| SENTIMENT | ||||||||
| SENTIMENT | 58 |
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| 360° VIEW | ||||||||
| 360° VIEW | 22 |
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ANALYSIS: With an Obermatt 360° View of 22 (better than 22% compared with alternatives), overall professional sentiment and engagement for the stock Morgan Stanley are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Morgan Stanley. The consolidated Value Rank has an attractive rank of 72, which means that the share price of Morgan Stanley is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 72% of alternative stocks in the same industry. The consolidated Sentiment Rank has a good rank of 58, which means that professional investors are more optimistic about the stock than for 58% of alternative investment opportunities. But the consolidated Growth Rank has a low rank of 21, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. The consolidated Safety Rank has a riskier rank of 24, meaning the company has a riskier financing structure than 76 comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a 360° View of 22, Morgan Stanley is worse than 78% of all alternative stock investment opportunities based on the Obermatt Method. This means that Morgan Stanley shares are on the riskier side for investors. Half of the consolidated Obermatt Ranks exhibit above-average performance, but the other half are below market levels. The company enjoys a good value (Value Rank of 72) and positive market sentiment in the professional investor community (Sentiment Rank of 58), but growth expectations are below-average (Growth Rank of 21) and the financing structure is on the risky side(Safety Rank of 24). This combination is rather dangerous, because high debt levels (low safety) require growth to finance the debt burden. The current low growth level may be temporary, because professionals are actually optimistic (high sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. Companies with less growth typically have a lower price than fast-growing competitors. Even though professional investor sentiment is strong, we recommend further evaluating whether the future of Morgan Stanley is as challenging as the stock's low price suggests. Since the professional community is optimistic, the stock might just be going through a more challenging phase now, indicating that timing might be good now. ...read more
Sentiment Strategy: Professional Market Sentiment for Morgan Stanley positive
ANALYSIS: With an Obermatt Sentiment Rank of 58 (better than 58% compared with alternatives), overall professional sentiment and engagement for the stock Morgan Stanley is above average. The Sentiment Rank is based on consolidating four sentiment indicators where all but one are above average for Morgan Stanley. Analyst Opinions are at a rank of 54 (better than 54% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. The Professional Investors rank is also good at 70, which means that currently, professional investors hold more stock in this company than in 70% of alternative investment opportunities. Pros tend to favor investing in this company. In addition, Market Pulse has a rank of 61 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 61% of competitors). But Analyst Opinions Change has a below-average rank of 40, which means that stock research experts are currently changing their opinions for the worse when it comes to recommending this stock. In other words, they are getting more critical of investments in Morgan Stanley. ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 58 (more positive than 58% compared with investment alternatives), Morgan Stanley has a reputation among professional investors that is above-average compared with that of its competitors. This is an early sign of caution, even if the stock has significantly appreciated. If analysts change their opinions, the stock may become too expensive. If the price is on the way down, the trend may continue. This may be a stock with a good reputation and history, but it may have reached its breaking point by now. Investors should look at the Value Ranks as well. If they indicate trouble, it might just materialize in the future. ...read more
Value Strategy: Morgan Stanley Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 72 (better than 72% compared with alternatives), Morgan Stanley shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, where three out of four indicators are above average for Morgan Stanley. Price-to-Sales (P/S) is 50 which means that the stock price compared with what market professionals expect for future sales is lower than for 50% of comparable companies, indicating a good value for Morgan Stanley's revenue size. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 67. Finally, compared with other companies in the same industry, dividend yields of Morgan Stanley are expected to be higher than for 68% of all competitors (an Dividend Yield rank of 68). The only low rank is for expected profits with a Price-to-Profit Rank of 43, indicating that the market expects the company's profit to be low despite a high dividend. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 72, is a BUY recommendation based on Morgan Stanley's stock price compared with the company's operational size and dividend yields. The low Profit Rank could result from a one-off charge, for instance, for an accident, a legal settlement, or a restructuring project. If the company keeps its dividends high, the low expected profit may be transitory. If that is the case, the three good value ranks for Sales, Capital, and Dividends are reliable indicators for good stock price value, a low stock price. ...read more
Growth Strategy: Morgan Stanley Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 21 (better than 21% compared with alternatives), Morgan Stanley shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Morgan Stanley. Sales Growth has a below market rank of 24, which means that, currently, professionals expect the company to grow less than 76% of its competitors. The same is valid for Capital Growth, with a rank of 29, and Profit Growth, with a rank of 47. Currently, professionals expect the company to grow its profits less than 53% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 55, which means that the stock returns have recently been above 55% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 21, is a SELL recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for Morgan Stanley, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with an above-market return. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive shareholder returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. ...read more
Safety Strategy: Morgan Stanley Debt Financing Safety risky
| SAFETY METRICS | May 25, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 13 |
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| REFINANCING | ||||||||
| REFINANCING | 93 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 6 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 24 |
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ANALYSIS: With an Obermatt Safety Rank of 24 (better than 24% compared with alternatives), the company Morgan Stanley has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Morgan Stanley is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Morgan Stanley and the other two below average. Refinancing is at 93, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 93% of its competitors. But Leverage is high with a rank of 13, meaning the company has an above-average debt-to-equity ratio. It has more debt than 87% of its competitors. Liquidity is also on the riskier side with a rank of 6, meaning the company generates less profit to service its debt than 94% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 24 (worse than 76% compared with alternatives), Morgan Stanley has a financing structure that is significantly riskier than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Morgan Stanley are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making a financial decision. ...read more
Combined financial peformance: Morgan Stanley Lowest Financial Performance
| COMBINED PERFORMANCE | May 25, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 72 |
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| GROWTH | ||||||||
| GROWTH | 21 |
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| SAFETY | ||||||||
| SAFETY | 6 |
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| COMBINED | ||||||||
| COMBINED | 19 |
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ANALYSIS: With an Obermatt Combined Rank of 19 (worse than 81% compared with investment alternatives), Morgan Stanley (Investment Banking & Brokerage, USA) shares have lower financial characteristics compared with similar stocks. Shares of Morgan Stanley are a good value (attractively priced) with a consolidated Obermatt Value Rank of 72 (better than 72% of alternatives) but show below-average growth (Growth Rank of 21), and are riskily financed (Safety Rank of 24), which means above-average debt burdens. ...read more
RECOMMENDATION: An Obermatt Combined Rank of 19, is a sell recommendation based on Morgan Stanley's financial characteristics. As the company Morgan Stanley's key financial metrics exhibit good value (Obermatt Value Rank of 72) but low growth (Obermatt Growth Rank of 21) and risky financing practices (Obermatt Safety Rank of 24), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 72% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. ...read more
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