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Morgan Stanley Call Options Suggested Ahead Of 2nd Quarter Earnings Report -

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Jul, 20th 12:08

Investors holding shares of Morgan Stanley (MS) have been treated well this week as the stock is up 6.61% over the past 5 trading days. The company is scheduled to report its 2016 second quarter earnings before Wednesday’s market open.

Morgan Stanley (NYSE:MS) stock closed yesterday’s trading at around $28.18, rising 0.71% on the day. The median 12-month price target for the stock by 23 analysts polled, is $29.00, suggesting that the stock could still gain more than 3% from current levels. The highest price target is $47, implying a potential upside of up to 33%.

In the most recent quarter, earnings per share (EPS) of Morgan Stanley had climbed to $0.55 from $0.43 in the previous quarter, with revenue reaching $7,792.00 million from $7,862.00 million. For the current quarter, economists predict that the company’ earnings will come in at $0.59 in comparison with $0.79 in earnings per share reported during the same period last year. Wall Street is expecting the New York-based financial holding company to report revenue of $8.3 billion from $9.7 billion during the same quarter last year.

The EPS is a key influencer of share prices, as the metric clearly shows what each share is worth based on the company’s earnings and indicates how much money shareholders make from investing in the company. When a company reports a sustainable earnings uptrend, it is a good signal that the company will dominate other companies in the market that have a more volatile earnings trend. Last year, Morgan Stanley’s EPS growth was 81.30% while their EPS growth over the past five years is 3.40%.  Analysts are forecasting the stock/company will grow by 24.17% over the next year and 7.85% over the next five.

Investors will closely watch the Sherwin-Williams’ guidance. Currently, Morgan Stanley is indicating full-year EPS of $13.21, significantly higher than the consensus estimate of $12.67. Updated full-year sales guidance is likely to be provided, as the company’s current revenue outlook implies negative to flat growth in the second half of the year. If Sherwin-Williams revises this estimate higher, it will likely be a lever for the stock price. Heading into the quarterly earnings release, Morgan Stanley analysts remain bullish on the stock, reiterating an Overweight rating.

MS

Fig: MS D1 Technical Chart

MS closed the last trading session at $28.18 after gaining continuously from 24.44. The price has been supported by the two moving averages below, indicating a continuous up-move to come. RSI is at level 63 and heading up, signaling strong buying power. The trend indicator is also encouraging long positions on the stock. It is expected that the bulls will continue to prevail.

Trade suggestion

Buy Digital Call Options from 28.18 to 30.10 valid until July 22, 2016

 

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