Gorman Says Morgan Stanley’s Stock Will Outperform S&P 500 Index |
| Bloomberg - Mar 16, 2012 |
Morgan Stanley Chief Executive Officer James Gorman said his firm’s stock will continue to outperform the Standard & Poor’s 500 Index (SPY) as bank shares climb back to tangible book value.
The U.S. financial sector’s valuation doesn’t reflect the strength of banks’ balance sheets shown by the Fed’s stress tests and their earnings potential in a normal environment, Gorman said today at a breakfast in New York hosted by Fortune magazine.
Financial stocks trading below tangible book value, or the value after excluding items such as goodwill, “implies somehow that the banking sector isn’t going to generate ROEs of 10 percent,” Gorman said, referring to return on equity. “That’s just not the way it’s going to pan out.”
Morgan Stanley has jumped almost 30 percent this year, after plunging 44 percent in 2011. The shares gained 9 cents to $19.60 at 12 p.m. in New York trading, leaving them at 70 percent of tangible book value.
Read Full Article from Bloomberg
- Posted: 2012-03-16 12:12:32
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