Morgan Stanley (MS)
Valuation Overview•Is Morgan Stanley Overvalued or Undervalued?
Commands a premium valuation multiple over its peers, likely pricing in superior execution.
Moderate quality score of 46/100, reflecting stable operating margins and manageable leverage.
Analysts remain bullish, forecasting further upside expansion with consensus targets suggesting solid gains.
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Verdict: Average quality business weighed down by significant solvency concerns.
Wall Street is highly bullish, projecting significant upside alongside robust expected earnings growth. This is paired with healthy capital returns, driven by a balanced mix of reliable dividends and share buybacks.
MS demonstrates adequate business quality with stable profitability. However, this is severely offset by a highly leveraged balance sheet (Debt/EBITDA > 4.0x) and elevated financial risk.
The company demonstrates solid revenue growth (9.5% 3Y CAGR) paired with robust earnings compounding (18.4% EPS 3Y CAGR). The company maintains healthy operational efficiency with a 19.5% operating margin.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $20.6B | +14.5% | +9.5% | +7.6% | +12.3% | |
| EBITDA | $7.7B | — | +13.7% | — | — | |
| Net Income | $5.6B | +25.9% | +15.2% | — | +10.7% | |
| EPS (Diluted) | $3.40 | +28.3% | +18.4% | +9.6% | +13.4% | |
| Free Cash Flow | -$7.9B | +2295.2% | — | — | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 58.0% | 56.5% | 69.4% | 76.9% |
| Operating Margin | 19.5% | 16.5% | 21.2% | 23.0% |
| Net Margin | 15.1% | 12.6% | 16.3% | 17.1% |
| FCF Margin | -0.9% | -1.3% | 7.2% | 5.8% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q3'26Latest | $2.89 | $3.46 | +19.7% | ||
| Q2'26 | $3.02 | $3.43 | +13.6% | ||
| Q1'26 | $2.43 | $2.68 | +10.3% | ||
| Q4'25 | $2.10 | $2.80 | +33.3% | ||
| Q3'25 | $1.98 | $2.13 | +7.6% | ||
| Q2'25 | $2.21 | $2.60 | +17.6% | ||
| Q1'25 | $1.62 | $2.22 | +37.0% | ||
| Q4'24 | $1.58 | $1.88 | +19.0% |
Total return is +27.2% (1Y), outperforming the benchmark by +11.2%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | +11.8% | -1.4% | — |
| 1Y | +27.2% | +11.2% | +2.6% |
| 3YCAGR | +36.5% | +15.3% | +13.7% |
| 5YCAGR | +16.6% | +5.8% | +17.3% |
| 10YCAGR | +21.6% | +8.5% | — |
The S&P 500 is at 31.6x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Morgan Stanley (MS) valuation, health, and returns.
Morgan Stanley is estimated to be fair under our discounted cash flow framework. relative multiples indicate the stock is Expensive versus peers compared to industry peers. trading near fair value (DCF: $184.34)
Morgan Stanley has multiple valuation anchors: DCF Intrinsic Value: $184.34 | Peer Relative Fair Value: $158.09 | Wall Street Analyst Target: $239.50 (implying +19.6% upside). A convergence of these signals offers higher conviction.
Morgan Stanley displays fair financial health with a composite quality score of 46/100, supported by a Piotroski F-Score of 7/9, Return on Invested Capital (ROIC) of 3.1%.
Morgan Stanley pays a 2.1% dividend yield, covered by a 39% payout ratio with 12 years of growth, supplemented by a 1.8% buyback yield.
Morgan Stanley's current growth trajectory is Accelerating. The company achieved +14.5% 1Y revenue growth and +28.3% 1Y EPS growth, compared to its 3Y revenue CAGR of +9.5%.
Wall Street consensus is Buy based on 52 analysts, beating EPS expectations in 92% of recent quarters with a 10-quarter streak. The consensus price target represents a +19.6% change from current levels.
Investment risks for Morgan Stanley include: -19.3% 1-year max drawdown, high beta (1.38x market volatility). Volatility risk is characterized by a beta of 1.38x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.