Morgan Stanley Stock Faces Headwinds, Says Analyst

Oppenheimer cut its price target as well

Deputy Editor
Oct 5, 2022 at 8:59 AM
facebook twitter linkedin

Morgan Stanley (NYSE:MS) stock is down 1.8% to trade at $82.50 before the bell, after Atlantic Equities downgraded the banking giant to "neutral" from "overweight." The analyst also cut its price target to $85 from $95, citing decreased investment banking activity, a pullback in equity markets, trading estimates that they feel "remain too optimistic," and a lack of near-term positive catalysts. In addition, Oppenheimer also cut its price target from $99 to $93.

There's plenty of room for even more brokerages to move in with bear notes as well. Coming into today, eight covering firms still rated Morgan Stanley stock a "strong buy," and the 12-month consensus target price of $94.87 is a 14.8% premium to last night's close. 

The options pits have flashed a penchant for bearish bets in recent weeks. Data at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows the MS sports a 50-day put/call volume ratio of 1.11, which stands higher than 98% of readings from the past year. This means puts are not only outpacing calls, but they've also been getting picked up at a quicker-than-usual clip.

It's worth noting that Morgan Stanley stock ranks low on the Schaeffer's Volatility Scorecard (SVS), with a score of just 13 out of 100. In other words, the security has consistently realized lower volatility than its options have priced in, making the stock a potential premium-selling candidate.

On the charts, Morgan Stanley stock's 320-day moving average rejected a mid-August rally just above the $92 level. By mid-September, this tumble sent the shares below the $84 mark and the 60-day trendline, the latter of which capped yesterday's 4.5% gain. As such, MS stands 14.5% lower year-to-date.


Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 



Special Offers from Schaeffer's Trading Partners