Using the PEG framework with analyst consensus forward EPS growth of 12.8% plus 2.5% dividend yield, Morgan Stanley has a fair value of $144.43 based on NTM EPS (FY2026) of $11.33. The current PEG ratio is 1.14.
PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.
PEG works well for steady growers with predictable earnings.
| EPS Growth RateForward | 10.2% |
| Dividend Yield | +2.5% |
| Adjusted Growth (clamped 8–25%) | 12.8% |
| Fair P/E | 12.8x |
| NTM EPS (FY2026) | $11.33 |
| Fair Value | $144.43 |
| Period | EPS Est. | Growth | Analysts |
|---|---|---|---|
| FY2025 (actual) | $10.20 | — | — |
| FY2026E | $11.33 | +11.0% | 13 |
| FY2027E | $12.32 | +8.8% | 11 |
| FY2028E | $13.32 | +8.1% | 7 |
| FY2029E | $15.06 | +13.0% | 3 |
4Y Forward EPS CAGR: 10.2%
| Year | Net Income | EPS | YoY |
|---|---|---|---|
| FY2021 | $15.0B | $8.03 | — |
| FY2022 | $11.0B | $6.15 | -23.4% |
| FY2023 | $9.1B | $5.18 | -15.8% |
| FY2024 | $13.4B | $7.95 | +53.5% |
| FY2025 | $16.9B | $10.20 | +28.3% |
4Y Historical EPS CAGR: 6.2%
The PEG Fair Value uses the Price/Earnings-to-Growth framework. A stock is fairly valued when its P/E ratio equals its earnings growth rate (PEG = 1.0). This model adds dividend yield to the growth rate per the original PEGY formula.
Growth rate priority: analyst consensus forward EPS CAGR (when ≥ 3 analysts cover the stock), falling back to historical EPS CAGR. Using EPS rather than net income avoids distortion from share buybacks. The growth rate is clamped between 8% and 25% — below 8% would undervalue stable earners, while above 25% would overvalue unsustainable spikes.