WM growth, capital returns to drive higher ROE
MS's multi-year shift to wealth management has helped drive substantial earnings and ROE improvement over the past five years. Yet we believe that there is more to come with ongoing growth in WM driven by a favourable market environment and technology-driven efficiency improvements. Furthermore, modifications to the SLR calculation could potentially free up significant amounts of capital, leading to an ROE in 2020 above our current forecast of 13.5%. We reiterate our Overweight recommendation with a raised price target of $66.Morgan Stanley is a financial holding company. Through its subsidiaries and affiliates, the company advises, and originates, trades, manages and distributes capital for, governments, institutions and individuals. The company's segments are: Institutional Securities, which provides investment banking, sales and trading, lending and other services; Wealth Management, which provides brokerage and investment advisory services, financial and wealth planning services, stock plan administration services, annuity and insurance products, residential real estate loans and other lending products, banking, and retirement plan services; and Investment Management, which provides investment strategies and products.
Formed in 2003 by an established team from Cazenove, one of the most respected investment banks in the UK, Atlantic Equities conducts and publishes fundamental, bottom up research on mid and large cap US companies.
Atlantic provide order execution through a wide range of DMA products and algorithmic trading suites.
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