Latest development4 months ago
Morgan Stanley Cautious on BioMar Over Input Cost Inflation
Morgan Stanley flags concerns over rising input costs threatening profit margins for the aquaculture feed producer.
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Morgan Stanley maintains a Buy rating, supported by strong profitability and asset inflows despite a 22% stock rally. The Return on Tangible Common Equity (ROTCE) in Q1 exceeded management's target, reaching 27.1%. The bank plans to enhance shareholder returns through a $20B buyback program and higher dividends. However, Morgan Stanley downgraded its outlook on the North American freight transportation sector from Attractive to In-Line. Additionally, it expressed caution regarding BioMar due to expected input inflation impacting earnings performance.
Morgan Stanley flags concerns over rising input costs threatening profit margins for the aquaculture feed producer.
Read the full storyThe bank believes record valuations already price in cyclical recovery and tightening capacity, limiting further upside for the sector.
The bank enters Q2 earnings season backed by a 27.1% ROTCE in Q1 and a massive $20 billion share buyback program despite a recent 22% stock rally.