Morgan Stanley (MS) Stock Forecast 2026: After the November 21 Dip, Is the Rally Running Out of Steam?

Published December 11, 2025 – Analysis & Outlook

Morgan Stanley’s stock (NYSE: MS) has raced back toward record highs after a brief pullback in late November. As of the afternoon of December 11, 2025, shares trade around $181–182, up from $158.17 at the close on November 21 – a gain of almost 15% in just three weeks. ^[1]

With the stock now well above most 12‑month analyst price targets and fresh legal headlines out of Europe, investors are asking a simple question: is Morgan Stanley still a buy, or has the market gotten ahead of itself?

This article walks through everything that has happened since November 21, 2025 – price action, earnings, legal developments, analyst targets and macro forecasts – and what it all may mean for Morgan Stanley’s stock in 2026.

1. Where Morgan Stanley Stock Stands Today

Recent price: About $181.70 as of mid‑session on December 11, 2025. ^[2]
Move since November 21: Up from $158.17 at the November 21 close, a roughly 14.9% gain in three weeks. ^[3]
Recent 52‑week range: Roughly $94.33 on the low end to around $180–181 on the high end, with new highs set in early December. ^[4]
Market cap & valuation: MarketBeat data puts Morgan Stanley’s market value near $280+ billion, trading around 18x earnings with a PEG ratio near 1.45 and beta about 1.2 – modestly richer than many big‑bank peers. ^[5]

In other words, MS isn’t a turnaround story anymore – it’s a large, highly profitable financial stock trading near record territory.

2. What Happened on November 21 – and Why It Mattered

The user‑specified starting point, November 21, 2025, was actually a down day for Morgan Stanley:

On November 21, the stock closed at $158.17, down slightly on heavy volume of just over 9 million shares. ^[6]
A same‑day note from AI‑driven platform Morpher highlighted that MS was down about 5.8% intraday and flagged a bearish near‑term signal, blaming a rotation in markets and profit‑taking rather than any company‑specific blow‑up. ^[7]

Morpher pointed to:

A shift in positioning across growth vs. value stocks,
Caution around mid‑cap demand in Dubai and broader financials,
And profit‑taking after strong prior gains. ^[8]

That dip, however, turned out to be a buyable wobble in a bigger uptrend. From there, the stock began a steep grind higher:

Nov 24: closed at $162.83, up nearly 3% on the day. ^[9]
Nov 26: reached $167.94. ^[10]
Nov 28: ticked up again to $169.66. ^[11]

By early December, those gains snowballed into new 52‑week highs.

3. December Surge: New Highs on Strong Earnings and Upgrades

3.1. Fresh highs and technical strength

On December 3, MarketBeat reported Morgan Stanley shares hitting a new 12‑month high around $172.18, with intraday trading as high as roughly $172 and closing above $173 that day. ^[12]

Another MarketBeat update on December 9 again highlighted the stock setting a new 52‑week high, noting: ^[13]

A 52‑week high near $180–181,
A price‑to‑earnings ratio around 18x,
And a sizeable market cap north of $280 billion.

On the technical/screening side, Investor’s Business Daily upgraded Morgan Stanley’s IBD SmartSelect Composite Rating to 96 (out of 99) on December 8, indicating the stock is outperforming 96% of the market on a blend of earnings, sales growth, margins and price action. The note also flagged: ^[14]

49% EPS growth in the latest quarter,
14% revenue growth, up from 11% the prior quarter,
And an Accumulation/Distribution rating of B‑, suggesting moderate net institutional buying.

That upgrade fits the story the chart is telling: momentum has been decisively bullish since late November.

4. Fundamentals Driving the Rally: Q3 2025 Earnings

Although the earnings release came on October 15, the market is still digesting the implications – and they form the backbone of the post‑November rally.

According to company filings summarized by MarketBeat and Investing.com: ^[15]

Q3 2025 EPS:$2.80, smashing the consensus of around $2.07.
Revenue:$17.98 billion, ahead of expectations of about $16.4 billion, and up roughly 18.5% year‑over‑year.
EPS growth: About 49% YoY and more than 30% quarter‑over‑quarter.
Profitability: Net margin around 13.8–13.9% and return on equity (ROE) ~16.4%.

A separate Zacks/Finviz summary added more color: ^[16]

Book value per share: about $62.98 as of Sept. 30, 2025.
Tangible book value per share: roughly $48.64.
Capital ratios: Tier 1 capital around 17.6%, Common Equity Tier 1 about 15.7% – very solid buffers for a global bank.

On top of that, analysts estimate “stable” long‑term EPS around $11.15 with an average ROE near 16.4%, according to Simply Wall St’s excess‑returns model. ^[17]

Bottom line on fundamentals:

The Q3 print showed broad‑based strength across investment banking, trading, and fee‑based businesses.
Capital and profitability metrics are comfortably above regulatory minimums.
That combination – strong earnings, strong capital, strong ROE – is exactly what tends to justify a higher valuation multiple for a bank stock.

5. Wealth, Asset Management and Private Markets: Why This Isn’t “Old Morgan Stanley”

One of the recurring themes in post‑earnings coverage is that Morgan Stanley today is less of a pure trading & investment banking shop and more of a diversified wealth and asset‑management platform.

A late‑November Zacks analysis (re‑posted via Finviz) highlighted: ^[18]

Wealth Management and Investment Management now contribute over 50% of total net revenues, up from about 26% in 2010.
From 2019–2024, Wealth Management client assets grew at a CAGR of ~18%, and Investment Management assets at almost 25%.
That momentum continued in the first nine months of 2025, underpinning more stable fee revenue.

Strategically, Morgan Stanley has:

Integrated E*TRADE and Shareworks,
Completed the Eaton Vance acquisition,
And in 2025 agreed to acquire EquityZen, a private‑shares marketplace, to deepen its presence in the private‑company ecosystem. ^[19]

These moves all support the same thesis: less dependence on lumpy trading revenue, more recurring fee income. That’s one reason many analysts are willing to value MS at a premium to some traditional capital‑markets peers.

6. Dividends, Buybacks and Total Shareholder Return

For income‑ and total‑return investors, the last few weeks have brought good news but also higher expectations.

6.1. Dividend growth

In 2025, Morgan Stanley raised its quarterly common dividend to $1.00 per share, up from $0.925 – an increase of a little over 8%. ^[20]

Coverage from Zacks and others notes that:

The company has increased its dividend five times in the past five years, with an annualized growth rate around 20%. ^[21]
At recent prices, the forward dividend yield sits in the low‑2% range (about 2.2–2.4%), comfortably above the industry average near 1% and slightly ahead of rival Goldman Sachs’ yield. ^[22]

An Investing.com piece also pointed out that Morgan Stanley has paid dividends for over three decades in a row, underscoring management’s emphasis on consistent capital returns. ^[23]

6.2. Buybacks

Alongside the dividend hike, Morgan Stanley:

Reauthorized a multi‑year share repurchase program of up to $20 billion, with no fixed expiration date. ^[24]
Repurchased roughly $1.1 billion of stock in Q3 2025, amounting to about 7 million shares, according to Zacks’ breakdown of the quarter. ^[25]

Buybacks at today’s elevated price can be a double‑edged sword – they boost per‑share metrics but can also destroy value if the stock is significantly overvalued. That becomes important when we look at current valuation.

7. Legal and Regulatory Overhang: The Dutch Tax Case

Amid all the bullish news, one headline from December 1 is decidedly less flattering.

According to Banking Dive and related reports: ^[26]

Morgan Stanley agreed to pay around $117.4 million to resolve a Dutch tax case.
Dutch prosecutors also fined its London and Amsterdam units about €101 million for dividend tax evasion related to complex trading in Dutch‑listed shares between 2007 and 2012.
Authorities alleged the bank illegally offset dividend withholding taxes and filed false corporate tax returns.

The settlement appears manageable relative to Morgan Stanley’s earnings and capital base, but it serves as a reminder:

Global universal banks frequently face legal and regulatory risks,
And even “legacy” conduct from more than a decade ago can lead to fresh fines and reputational scrutiny today.

For now, markets seem to be treating this as a one‑off clean‑up item rather than an existential threat, but it’s part of the evolving risk picture.

8. Analyst Ratings and Price Targets Since November 21

8.1. Street consensus: Moderate Buy, modest downside

MarketBeat’s live consensus data (updated in early December) shows: ^[27]

18 analysts covering Morgan Stanley in the last 12 months,
Overall rating: “Moderate Buy”,
Rating mix: 11 Buy / 7 Hold / 0 Sell, with some “Strong Buy” tags in the mix,
Average 12‑month price target: $173.38, with a range of $144 to $198.

At the current price around $181–182, that average target implies a slight downside of roughly 4–5% over the next year.

MLQ.ai’s aggregation shows a similar picture: ^[28]

A broader set of 50 analysts with an overall “Buy” consensus,
An average 12‑month target near $173–174,
A high target around $198, low near $165.

In short, the stock has run ahead of the average Wall Street target during the late‑November/early‑December rally.

8.2. Zacks and valuation spreads

The more narrative‑driven Zacks coverage since November 21 has been notably bullish:

A November 26 article celebrated Morgan Stanley’s 31.6% year‑to‑date gain and rated the stock a Zacks Rank #1 (Strong Buy), citing rebounding M&A, expanding wealth & asset management and robust capital distribution. ^[29]
Another Zacks piece on November 26 comparing Goldman Sachs vs. Morgan Stanley noted that MS trades at a forward P/E of about 16x, above the industry’s roughly 14x, reflecting a valuation premium. ^[30]

More recently, some screens show Zacks shifting MS to a Rank #3 (Hold) as the price moved well above earlier targets, but the broader tone remains constructive. ^[31]

8.3. A contrarian view: “Overvalued” by ~22%

Not everyone thinks the current price is justified.

Simply Wall St’s “excess returns” model concludes that Morgan Stanley is trading at about a 22.4% premium to its estimated intrinsic value, based on: ^[32]

A current book value per share around $62.98,
An expected future book value near $68.11,
Stable long‑run EPS around $11.15,
And a calculated “excess return” value that’s lower than today’s market price.

They summarize the result bluntly as “OVERVALUED”, suggesting investors may be paying up for growth, capital returns and macro optimism.

9. Macro Tailwinds: Morgan Stanley’s Own 2026 Outlook

Part of the enthusiasm for bank stocks in late November has come from Morgan Stanley’s own research desk.

On November 17, the bank released its 2026 global strategy outlook, widely reported by Reuters and summarized by several sites. Key points: ^[33]

The firm expects U.S. equities to outperform the rest of the world in 2026,
Sees risk assets “well‑prepared” for strong performance thanks to AI‑driven capital expenditure and a friendlier policy backdrop,
Forecasts “moderate” global growth alongside deflationary forces, with high uncertainty and the U.S. as the key swing factor,
Projects the S&P 500 reaching around 7,800 by the end of 2026, roughly 16% upside from current levels as of mid‑November,
Expects U.S. small‑caps and cyclical sectors to beat defensive and non‑U.S. markets, and even calls for gold to reach about $4,500 per ounce by 2026.

Earlier in 2025, another Morgan Stanley mid‑year outlook set a target of 6,500 for the S&P 500 by mid‑2026, with similar logic around earnings growth, a weaker dollar and a shift toward rate cuts. ^[34]

For Morgan Stanley’s own stock, those forecasts carry two implications:

Tailwind for deal‑making and trading: A bullish, AI‑driven risk‑asset environment supports underwriting, M&A and trading revenue.
Higher expectations baked in: When a bank’s research arm is openly bullish on markets, investors will expect the bank to capitalize on that environment – which can raise the bar for future earnings.

10. Ownership Trends: Institutions in the Driver’s Seat

Several recent pieces since November 21 highlight who actually owns Morgan Stanley and how that’s shifting:

A Yahoo Finance/Simply Wall St article on November 27 noted that institutional investors own the vast majority of Morgan Stanley shares, and that the stock had gained about 3.5% over the prior week, reinforcing institutional confidence. ^[35]
MarketBeat’s December 10 filing summary showed Menora Mivtachim Holdings cutting its MS stake by about 50.5% in Q2 (selling roughly 539,100 shares), but also highlighted a variety of smaller firms adding to positions, and overall institutional ownership around 84%. ^[36]

High institutional ownership is a double‑edged sword:

It supports liquidity and can dampen wild retail‑driven swings,
But it also means performance expectations are high – if the story cracks, institutions can move quickly.

11. Key Risks After the Rally

Even bulls acknowledge that Morgan Stanley’s stock is not without meaningful risks, especially after the post‑November run‑up.

11.1. Valuation risk

Trading near all‑time highs and above the average 12‑month target, MS now bakes in a lot of good news. ^[37]
It sits at a premium forward P/E versus many large U.S. banks and a significant premium to its own modeled intrinsic value in some frameworks. ^[38]

If deal activity disappoints, markets wobble, or expenses climb faster than expected, multiple compression could hit the stock even in the absence of a big earnings miss.

11.2. Legal and regulatory overhang

The Dutch dividend‑tax settlement and fines show that legacy conduct risk is still alive – and that regulators around the world are willing to go after big banks years later. ^[39]
Reuters also recently reported that the firm has been questioned by a U.S. House panel over its role in Zijin Mining’s Hong Kong IPO, underscoring ongoing political and regulatory scrutiny of cross‑border capital flows. ^[40]

While these issues don’t currently threaten Morgan Stanley’s survival or capital base, they add noise and headline risk.

11.3. Cyclicality and dependence on markets

Zacks and others have flagged that despite diversification, Morgan Stanley still:

Relies meaningfully on trading revenue,
Is heavily exposed to global M&A and capital markets cycles,
And is ramping up exposure to AI, data‑center and private‑markets themes, which could cool if macro conditions worsen. ^[41]

If the robust 2025 rally in risk assets gives way to a sharp correction – something even Morgan Stanley’s own CEO has warned could be 10–15% in global equities – then earnings and sentiment could both take a hit. ^[42]

12. So Is Morgan Stanley Stock a Buy, Hold, or Sell After November 21?

Putting it all together:

The bullish case

Earnings momentum: Q3 2025 was a blowout quarter, with strong EPS and revenue growth, high ROE and a robust capital cushion. ^[43]
Business mix: Wealth and asset management now drive more than half of revenue, making earnings more stable and fee‑based than a decade ago. ^[44]
Capital return: A growing dividend (now $1.00 per quarter) and a $20B buyback authorization signal confidence in long‑term earnings power. ^[45]
Macro backdrop: Morgan Stanley’s own research is bullish on U.S. equities and risk assets through 2026, and the bank is well positioned to benefit from sustained deal‑making and AI‑driven investment trends. ^[46]

The cautious case

Valuation stretch: The stock is now above average Street targets and trades at a premium P/E and price‑to‑book multiple, with at least one detailed model calling it ~22% overvalued. ^[47]
Legal/regulatory noise: The Dutch tax settlement and related fines reinforce the non‑trivial legal risk that comes with global banking. ^[48]
Late‑cycle feel: Whether it’s the Fed’s policy path, shifting tariff regimes, or AI exuberance, markets are pricing in a fair amount of good news. That leaves less margin for error for a stock already up 30‑plus percent in 2025. ^[49]

A balanced takeaway (not personalized advice)

For long‑term, risk‑tolerant investors who:

Believe in the secular growth of wealth and asset management,
Think AI‑driven investment and private markets will remain strong profit pools, and
Are comfortable with bank‑cycle volatility,

Morgan Stanley still looks like a high‑quality franchise with attractive long‑run economics and a solid, growing dividend stream.

For investors who:

Are more valuation‑sensitive,
Worry about late‑cycle risk after a sharp rally, or
Prefer not to take on regulatory and macro uncertainty,

The current setup may argue for patience, waiting for a pullback toward or below the low‑$170s (roughly in line with consensus targets) rather than chasing near all‑time highs.

Either way, after the November 21 dip and the December breakout, Morgan Stanley stock has clearly moved from “undervalued recovery play” to fully‑priced market leader – and that shift should shape how investors think about risk, reward and timing from here.

References