Morgan Stanley is anticipated to report a decline in its Q3 earnings, with FactSet analysts forecasting $1.28 per share, down from $1.47 a year ago. Estimize analysts have provided a slightly higher estimate of $1.37 per share. The bank's revenue, however, is expected to see a marginal rise to $13.22 billion from last year's $12.99 billion.
The bank's stock has been under pressure due to turbulent market conditions marked by spikes in Treasury yields and geopolitical uncertainty. Over the past month, the stock has dropped nearly 10%, with a 4.4% fall recorded in Q3.
Despite these challenging conditions leading to strong trading figures due to robust equities and active fixed income markets, the performance of Morgan Stanley's wealth-management unit remains uncertain.
Adding to this uncertainty is the upcoming leadership transition at the bank. CEO James Gorman is set to depart by May 2022, which could potentially impact the bank's future direction and strategy.
UBS analysts recently downgraded Morgan Stanley to 'Neutral' from 'Buy', along with a cut in his price target from $110 to $84. They cited several challenges facing the bank including deposit sorting/yield-seeking, intense competition for talent, and a difficult revenue environment.
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