Summary
- Morgan Stanley, earnings-wise, did not have the best of quarters, yet it continues to evolve into a financial institution that will produce good results in this "modern" era.
- Morgan Stanley earned a 13.1 percent return on shareholder's equity in the first quarter second only to 16.0 percent earned by JPMorgan Chase among the largest six US financial institutions.
- Furthermore, large declines in trading revenue and investment banking fees were offset by solid performances elsewhere in the bank confirming the new Morgan Stanley business model.
Well, the first quarter, large bank earnings season is over.
Closing the scene was Morgan Stanley (NYSE:MS), whose results for the period turned out to be the worst of the “Big Six” financial institutions.
Net income of Morgan Stanley in the first quarter was down 9 percent from the first quarter of 2018.
But, according to the Wall Street Journal
“Morgan Stanley stock gained another nearly 2% in premarket trading after the bank’s first-quarter earnings beat Wall Street expectations.”
This response shows, to me, how investors are looking at Morgan Stanley versus, say, Bank of America (NYSE:BAC), whose stock price dropped after its first quarter earnings were announced, even though they were better than those returned by MS.
And, it should be noted that through Tuesday’s close, Morgan Stanley stock was up 18.5% this year, compared with 16% for the broader S&P 500.
Investors seem to have a more positive view of James Gorman, Morgan Stanley’s Chief Executive Officer and what he has done in “turning around” Morgan Stanley, than they do of Brian Moynihan and what Mr. Moynihan has done with Bank of America.
