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Traders Wonder Whether Morgan Stanley Can Continue Banks' Q3 Beat Streak

Traders Wonder Whether Morgan Stanley Can Continue Banks' Q3 Beat Streak|NYSE:MS

Investors are awaiting with bated breath the results from the last of the Mohicans among investment banks.

Morgan Stanley MS 1.67% is due to release its third quarter results before the markets open on Wednesday.

Analysts, on average, expect earnings of $0.63 per share, up from $0.34 per share last year. Revenues are also expected to rise to $8.17 billion from $7.33 billion in the year-ago period.

If trend is anything to go by, Morgan Stanley could be gearing up for beats on both the top and bottom line. Fixed income trading revenues offered a cushion for most banks, which have reported already. For Morgan Stanley, fixed income trading revenues make up roughly 16 percent of total revenues.

Q3 Banking Recap Thus Far

  • Bank of America Corp BAC 1.31% stood tall and towering with 7.90 percent earnings per share growth, with the increase marking the first in three quarters. The company's revenues grew 2.86 percent to $21.6 billion and exceeded estimates by 3.15 percent.
  • Citigroup Inc C 0.8% reported earnings per share of $1.24, down 8.15 percent year-over-year, and yet beat the $1.16 per share consensus estimate. Revenues declined 4.81 percent to $17.8 billion, but beat estimates by 2.65 percent.
  • JPMorgan Chase & Co. JPM 0.79%'s third-quarter earnings per share fell 5.95 percent to $1.58 but were ahead of the $1.39 per share consensus estimate. The company reported a 8.37 percent increase in its managed net revenues to $23.54 billion, with revenues exceeding estimates by roughly 2 percent.
  • Wells Fargo & Co WFC 1.01%, which created a furor with its sales practices scandal, also saw a modest drop in its earnings per share to $1.03, although the metric was 1.98 percent ahead of estimates.

Barclays said in a note last week that it expects Morgan Stanley to report overwhelming results, given a better FICC environment. The firm forecasts ROE in the 8 percent area.

At time of writing, shares of Morgan Stanley were up 1.24 percent at $32.19.

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DateFirmActionFromTo
Oct 2016Compass PointInitiates Coverage OnNeutral
Oct 2016JefferiesMaintainsBuy
Sep 2016CLSAMaintainsOutperform

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