One of the most notable banking stock earnings reports will come out on Tuesday after the holiday. There is no doubt that the report from Morgan Stanley (NYSE: MS) will be at the center of traders' radar Tuesday morning to see how they did. Banking stocks make up almost one third of the S&P 500 and one big mover can certainly have an effect on the overall markets.
Analysts are bullish on what they expect from the earnings. The street has an expectation that Morgan Stanley will report year over year increases in both revenue as well as profits. Analysts are looking for earnings per share of $0.65, up from $0.43 a year ago, and revenue of $8.47 billion. Earnings are expected to rise 2.2% to $2.76 per shares.
Now, last quarter Morgan Stanley had no problem beating the streets expectations. This quarter we have already seen better than expected results from Bank of America (NYSE: BAC) and JPMorgan Chase (NYSE: JPM). Both reported strong trading revenue which analysts expect that Morgan Stanley will also see the same benefit. With the strong reports from banks already it really puts the pressure on Morgan Stanley to continue to momentum.
The focus will also be on Morgan Stanley's guidance going forward. Specifically on how the expect to perform in a rising interest rate environment. As for the fiscal 2017 guidance, the street still expects the bank to earn $3.30 per shares on $30.07 billion in revenue.
As for the share performance, MS is up 3.69% year to date which out performs the S&P 500 which is only up 1.6% in the same time period. Analysts have an average of a hold rating with a 12 month price target of $44.