Is Morgan Stanley overvalued or undervalued?

As of 9 September 2025, Morgan Stanley's valuation grade has moved from expensive to very expensive. The company is currently overvalued, as indicated by its P/E ratio of 17, which is lower than the peer average of 18.52, and an EV to EBITDA ratio of 37.04, which is also below the industry average. Additionally, the PEG ratio stands at a low 0.33, suggesting that the stock may not be growing at a rate that justifies its current valuation.
In comparison to its peers, The Goldman Sachs Group, Inc. has a significantly higher P/E ratio of 41.63, while The Charles Schwab Corp. is considered attractive with a P/E of 25.67. Despite Morgan Stanley's strong recent performance, with a 1Y return of 60.36% compared to the S&P 500's 17.14%, the high valuation metrics suggest that the stock may not be a prudent investment at this time.