Wall Street is back, baby! And if you need evidence just take a look at Morgan Stanley’s (MS) financial results today.
Reuters Morgan Stanley reported a profit of 65 cents a share, easily topping analyst forecasts for 54 cents a share, on sales of $8.7 billion, well ahead of the Street consensus for $8.2 billion. And like Goldman Sachs (GS), which reported yesterday, trading revenue surged.
Citigroup’s Keith Horowitz and Christopher Larmoyeux explains how Morgan Stanley blew away forecasts:
Relative to our estimate, the beat was entirely driven by the top-line which came in 15c higher due to better than expected I-Banking, FICC and Equities. Both comp and non-comp expenses were in line with our estimates. Global Wealth Management revenues came in slightly higher than expected but their 22% PT margin was in line with our estimates…
The solid beat on revenue despite a higher bar for capital markets names headed into the quarter and the continued improve in GWM's pre-tax margin should be positive for the stock, especially given its recent ~10% sell-off over the past few weeks.
MKM Partners’ David Trone says “buy Morgan Stanley.” He explains why:
We view this as a great quarter, which demonstrates good progress on both production and efficiency. We continue to like MS and its peers, and believe the recent pullback represents an attractive buying opportunity. We expect a good 4Q14 follow-through, and believe CCAR capital returns will be increased in the next couple of cycles as excess capital builds.
Shares Morgan Stanley have gained 2% to $33.17 at 2:12 p.m. today, while Goldman Sachs has advanced 1.8% to $175.66.
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