Wall Street analysts revealed bold predictions on four portfolio stocks this week, as investors digested the latest inflation data and December earnings season kicked off. Here’s a summary of each report, along with the Club’s updated take on each. Morgan Stanley Wall Street’s take: HSBC cut Morgan Stanley’s rating to hold from buy on Monday, citing weaker guidance for the firm’s wealth management business. “We have cut our earnings estimates notably for Morgan Stanley in recent months even as the share price has risen, leading to a material increase in the PE (c15x 2024e) despite a softening outlook for wealth management (a higher multiple business) revenue,” analysts wrote ahead of the bank’s Jan. 16 earnings release. MS 1Y mountain Morgan Stanley 1 year The Club’s take: We don’t blame analysts for stepping to the sidelines. Bank stocks have had a stellar performance over the past couple of months, and when expectations are high heading into earnings it can lead to sell-the-news events. And to be fair, weakness in its Wealth Management unit was the driver behind the stock’s near 7% decline on earnings in October. Still, Morgan Stanley has strong growth prospects from its investment banking segment, a business we see improving on a better macroeconomic outlook and a pickup in deal activity. The company is scheduled to report its fourth-quarter earnings next Tuesday before the opening bell. Apple Wall Street’s take: Redburn Atlantic downgraded shares of Apple to neutral from buy on Wednesday, citing limited growth opportunities. “While we expect the iPhone to return to growth in CY24, we see little room for upside over the next few years, and an anticipated underwhelming March quarter could impact confidence in this outlook. At the same time, there appears to be rising regulatory risk that may impact Apple’s ability to monetize its ecosystem,” analysts argued. AAPL 1Y mountain Apple 1 year The Club’s take: After Apple’s nearly 50% gain in 2023, it’s fair to…
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