On October 21, 2009
Morgan Stanley, Wells Fargo Earnings Reveal A Confused Consensus Among Bank Analysts
When you look under the hood, the strong third-quarter performances of Morgan Stanley and Wells Fargo make for a great example of how uncertain — and conflicted — opinions are in the banking sector right now. Morgan Stanley increased its involvement in risk-based activities such as underwriting and trading, and thus managed to eke out a profit that beat expectations. But its earnings are still way below what they were before the house of cards came tumbling down: Morgan Stanley said that it earned $757 million, or 38 cents a share last quarter vs. $7.7 billion, or $6.97 a share in the same period a year ago. At around $35 a share, Morgan Stanley is therefore 72 percent more expensive…
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