Growing the firm’s client investments to $10 trillion from $6.5 trillion today would be a fitting pre-retirement goal for Morgan Stanley CEO James Gorman writes johnsfoley:
James P. Gorman, chairman & CEO of Morgan Stanley, testifies before a House Financial Services Committee hearing on "Holding Megabanks Accountable: A Review of Global Systemically Important Banks 10 Years After the Financial Crisis" on Capitol Hill in Washington, U.S., April 10, 2019.NEW YORK, Jan 19 - James Gorman has set his firm a big new target and hinted at another.
Like its rivals Morgan Stanley had a busy year underwriting capital raising, advising on deals and trading stocks and bonds. Investment bank revenue was 46% higher than in 2019. But future growth will come largely from the wealth management business, which includes online brokerage E*Trade, and investment management. Together those divisions attracted roughly $140 billion of new money in the fourth quarter.
is today. Right now, the Wall Street firm makes around 0.5 cents a year in revenue per dollar it oversees. If Gorman can boost assets without lowering fees, annual revenue will be $50 billion.Gorman says he wants the wealth business to earn a 30% pre-tax profit margin. Apply that to the expanded revenue, deduct tax, and Morgan Stanley’s fund businesses would earn $12 billion. Investors currently value BlackRock 16 times the company’s expected 2024 earnings, according to Refinitiv.
Rivals will have other ideas, and the battle for customers’ money is fierce. But the unspoken goal of a 50% uplift in Morgan Stanley’s share price isn’t a bad one for what are likely to be Gorman’s last years at the firm he has led for over a decade. He has joked that Morgan Stanley could be a $200 stock – double its level on Wednesday. Unless stock markets really get carried away, that sounds like a target too far.- Morgan Stanley on Jan. 19 reported $14.
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