Ever wondered if Morgan Stanley’s stock is the opportunity you’ve been waiting for? Let’s dig in to see what’s really driving its perceived value right now.
The stock recently closed at $162.29, showing a year-to-date surge of 30.1% and a gain of 26.7% over the past year, though it dipped 4.5% in the last week alone.
Market chatter has picked up amid sector rotation into financials, driven by renewed optimism around interest rate cuts. Recent headlines about Morgan Stanley expanding its wealth management footprint and making strategic leadership changes have also caught investors’ attention.
Our initial valuation score for Morgan Stanley comes in at 3 out of 6 on key metrics, meaning it appears undervalued in half of our checks. Next, we will break down how this score was calculated using different approaches, so keep reading for a smarter way to think about valuation later in the article.
Morgan Stanley delivered 26.7% returns over the last year. See how this stacks up to the rest of the Capital Markets industry.
The Excess Returns model evaluates a company’s value by measuring how much return it generates above its cost of equity on invested capital. This method focuses on long-term profitability instead of relying solely on cash flow projections. For Morgan Stanley, key metrics highlight its ability to create shareholder value above the basic cost of capital.
Morgan Stanley’s Book Value per share is $62.98, and its Stable Earnings Per Share are estimated at $11.10, based on weighted future Return on Equity estimates from 13 analysts. The Cost of Equity is calculated at $6.64 per share, resulting in an Excess Return of $4.46 per share. This indicates an Average Return on Equity of 16.30%, reflecting strong capital efficiency. In addition, the Stable Book Value is projected to reach $68.10 per share, according to future estimates from 14 analysts.
According to this model, the intrinsic value per share is estimated at $136.77. With the recent share price at $162.29, the stock appears to be 18.7% above its intrinsic value, which suggests it is currently overvalued by this approach.
Result: OVERVALUED
Our Excess Returns analysis suggests Morgan Stanley may be overvalued by 18.7%. Discover 897 undervalued stocks or create your own screener to find better value opportunities.
MS Discounted Cash Flow as at Nov 2025
Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Morgan Stanley.
The Price-to-Earnings (PE) ratio is widely recognized as a valuable yardstick for profitable companies like Morgan Stanley because it connects the company’s current share price to its annual earnings. This makes it easier to gauge whether investors are paying a fair price for each dollar of net income. For companies with steady profits, the PE ratio helps investors quickly compare relative valuation across peers and industries.
Growth expectations and business risks play a crucial role in shaping what an appropriate or “fair” PE ratio should be. Companies with stronger growth prospects or more resilient business models tend to justify higher PE ratios, while businesses facing cyclical challenges or higher risk typically trade at lower multiples. Morgan Stanley is currently trading at a PE ratio of 16.57x, sitting well below the Capital Markets industry average of 23.69x and the peer average of 29.15x. This gap might suggest the stock is trading at a discount, but these benchmarks do not always capture company-specific dynamics.
This is why Simply Wall St’s proprietary Fair Ratio comes in handy. The Fair Ratio, calculated here at 18.76x, evaluates factors such as Morgan Stanley’s growth outlook, profit margins, market cap, risk profile, and broader industry conditions to determine a more tailored valuation benchmark. Unlike a simple industry or peer average, the Fair Ratio aims to recognize why a specific company may deserve a premium or discount in today’s market. Since Morgan Stanley’s current PE (16.57x) is moderately below its Fair Ratio (18.76x), this suggests the stock is undervalued based on its fundamentals.
Result: UNDERVALUED
NYSE:MS PE Ratio as at Nov 2025
PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1415 companies where insiders are betting big on explosive growth.
Earlier, we mentioned there is an even better way to understand valuation. Let’s introduce you to Narratives. Narratives are an easy and accessible tool that let you map out your story for a company, backing up your perspective about future revenue, margins, and fair value with actual numbers. By linking the company’s business story to a financial forecast and then to a fair value, Narratives give you more control and clarity over your own investment decision. This provides much more than just following the market consensus.
Narratives are available on Simply Wall St’s platform within the Community page, used by millions of investors. They make it easy to see if you have a reason to buy or sell by comparing your assumed Fair Value (based on your story and estimates) to the current share price. The best part is that these Narratives are dynamic. When news or earnings are released, forecasts and fair value numbers update automatically, so your view always reflects the latest information.
For example, some investors see Morgan Stanley’s future as bright and set a bullish Narrative with a target price of $160, while others remain more cautious and land closer to $122. This highlights how powerful it is to tailor the story and numbers to your own beliefs.
Do you think there’s more to the story for Morgan Stanley? Head over to our Community to see what others are saying!
NYSE:MS Community Fair Values as at Nov 2025
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include MS.
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