UBS Raises Price Target to $46 on Morgan Stanley (MS) Following 2Q15 Results

UBS reiterated a Buy rating on Morgan Stanley (NYSE: MS), and raised the price target to $46.00 (from $43.00), following its 2Q15 report. MS reported EPS of $0.79, beating consensus by 5c. Analyst Brennan Hawken raised 2015 estimate to $3.40 from $3.30 per share due to the 2Q beat.

Hawken commented, "Margins in WM expanded yet again, and we see continued NII growth and expense discipline driving margins to our 25.4% forecast exiting 2015 (23.8% FY2015, within the 22%-25% target). The onboarding of Citi's deposits is now complete but the outlook for loan growth remains robust, and we are forecasting loan growth of nearly 40% in FY2015, and 20% next year, as the growth rate slows. Also, MS's rate sensitivity disclosure (in last quarter's 10-Q which had some investors concerned that MS was becoming less rate sensitive) is based upon the increase in earnings over their baseline assumption, which already included a few rate hikes from the Fed. Therefore, we do not believe this disclosure was a substantial indication of anything changing at MS. In addition, the recruiting environment for FAs has been fairly stable, which could help limit upward pressure on comp and provide another tailwind to WM PT margins."

For an analyst ratings summary and ratings history on Morgan Stanley click here. For more ratings news on Morgan Stanley click here.

Shares of Morgan Stanley closed at $40.04 yesterday.

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