Post-earnings sell-off creates buying opportunity for the stock

Argus analysts say a sell-off from a major financial services company following its latest quarterly report has created a buying opportunity.

Shares of Morgan Stanley Capital International (MSCI) have underperformed the market over the past quarter, falling 21% while the S&P 500 rose 5%.

The company's shares fell 13% on April 23 after the company reported first-quarter adjusted earnings per share rose 12% from a year earlier, exceeding Wall Street expectations. Revenue was slightly below expectations.

However, Argus noted that MSCI management recently raised its dividend by double digits, signaling confidence in its prospects. The firm maintained a buy rating and $520 price target on the stock.

“We expect MSCI to benefit over time from global GDP growth, the increasing popularity of passive investment strategies and the development of ESG and climate investing in developed and emerging economies,” Argus said. “There are also opportunities for the company. Develop new products, improve profits and expand through targeted acquisitions.”

“Going forward, we expect low double-digit EPS growth, multiple expansion and share price appreciation as the company continues to expand in its target markets,” the company added.

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