Goldman Sachs and Morgan Stanley, which by revenue still remain predominantly banks with investment banking business, also bank holding companies, are undervalued.
Goldman Sachs' intrinsic worth is 340 billion USD, while Morgan Stanley's intrinsic worth is 260 billion USD.
Goldman Sachs is grossly undervalued on mismanagement, namely the 1MDB scandal and the lack of full punishment of the guilty parties, especially the highest ranking, at least according to media reports.
Such a brazen fraud as the 1MDB scandal turns clients away, because the 1MDB scandal shows gross misconduct at Goldman Sachs and a lack of proper controls and oversight to correct it.
Goldman Sachs still has an excellent mergers and acquisitions, equity and debt underwriting franchise, by many rankings top of the world coupled by a first in class merchant banking/private equity like business. Goldman Sachs' wealth management is also excellent.
In short, Goldman Sachs is grossly undervalued and with time Goldman's valuation and market capitalization will slowly go where they should be.
Morgan Stanley is also undervalued, but not so much as Goldman Sachs. Morgan Stanley' wealth and asset management business is doing extremely well and driving Morgan Stanley's higher valuation multiples compared to Goldman Sachs. That said, trading and mergers and acquisitions, equity and debt underwriting still make the majority of revenue at Morgan Stanley. True, large part of the stocks trading revenues comes from the private banking wealth clients, but the integrated full service investment bank model is one of the most important competitive advantages of Morgan Stanley.
Compared to technology companies, artificial intelligence and cloud computing companies especially, all other sectors of the economy's publicly listed companies look undervalued.
Financials, industrials and commodities are the value oriented sectors currently.
Goldman Sachs and Morgan Stanley from the investment banking business are especially undervalued among banks is Wolfteam Ltd.'s corporate opinion.
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