Will the Morgan Stanley Comeback Stall In 2013?

E = Equity to Debt Ratio Is Weak

The debt-to-equity ratio for Morgan Stanley is weak, but that’s normal for the sector. Morgan Stanley isn’t a direct competitor to Bank of America (NYSE:BAC) and Citigroup (NYSE:C), but these are good barometers. You might be surprised to find strong balance sheets in all cases.

Debt-To-Equity

Cash

Long-Term Debt

MS

2.62

$353.07 Billion

$168.44 Billion

BAC

2.50

$567.49 Billion

$266.53 Billion

C

2.89

$796.57 Billion

$271.86 Billion

 

T = Technicals on the Stock Chart Are Mixed

Morgan Stanley has underperformed Bank of America and Citigroup for every timeframe listed below over the past three years. It doesn’t matter if Morgan Stanley is a direct competitor or not; you want to make the best investment.

1 Month

Year-To-Date

1 Year

3 Year

MS

18.94%

2.46%

22.99%

-32.09%

BAC

22.27%

3.10%

107.40%

-19.51%

C

20.98%

4.65%

46.32%

25.34%

 

At $20.19, Morgan Stanley is currently trading above all its averages.     

50-Day SMA

17.47

100-Day SMA

16.91

200-Day SMA

16.14

 

E = Earnings Have Been Disappointing

Earnings have been disappointing as well as unpredictable. EPS has also failed to reach its 2007 level. Revenue has been climbing since 2009, but it’s still nowhere near what it was in 2007/2008. Ironically, this can be looked at as a positive because it shows that there is a lot more room for growth, even though that growth has already been achieved in the past.

2007

2008

2009

2010

2011

Revenue ($)in billions

83.76

58.40

22.49

30.49

32.05

Diluted EPS ($)

2.90

1.39

-0.77

2.63

1.23

 

When we look at last quarter on a YoY basis, we see a significant decrease in revenue and earnings. However, this didn’t faze investors much.

9/2011

12/2011

3/2012

6/2012

9/2012

Revenue ($)in billions

11.42

-35.00M

8.54

8.44

6.83

Diluted EPS ($)

1.15

-0.04

-0.06

0.29

-0.55