Fundamentals · MS

DuPont (ROE Decomposition) for MS

AI-generated plain-English read of dupont (roe decomposition) for MS. Updated daily.

ROE is rising (4.8%) but the engine is leverage: a 14.26× equity multiplier means a small drop in profitability gets amplified straight into the bottom line. Genuine improvement would show up in margins or asset efficiency first.

What will probably happen

ROE is on an upward path: if the leading leg continues, the next reported period should sustain or extend the gain.
Critical leverage flag: a 14.26× equity multiplier means any margin contraction of even a few percentage points will wipe out ROE disproportionately. Watch for earnings revisions or debt-service pressure.

What to do

If you HOLD this stock: The 14.26× leverage is a structural risk for holders. Any macro headwind (rate rise, demand drop) that compresses margins gets amplified into ROE. Ensure your thesis accounts for this: the company has less margin of safety than its headline ROE suggests.
If you are EVALUATING this stock: Don't let the headline ROE (4.8%) mislead you: it's primarily a function of 14.26× leverage. A cleaner way to compare this company is on ROIC or on ROA, which strip out the capital structure effect.
If you trade OPTIONS: No sharp DuPont signal either way. Premium is fairly priced for a fundamentals-stable story. Wait for a clearer inflection in one of the legs before positioning directionally.

26 periods with all three DuPont legs populated: trend reads are reliable.

Technical details

Technical analysis

Profitability (net margin): 28.1%, stable, healthy
Asset efficiency (turnover): 0.01×, stable, healthy
Leverage (equity multiplier): 14.26×, improving, worrying [CRITICAL]
ROE: 4.8%, improving
Primary ROE driver: Leverage Driven
Periods analysed: 26
Sector context: not provided

Key levels

Key price and metric levels
Level	Value
latest roe	0.048
latest margin	0.281
latest turnover	0.012
latest em	14.263
em critical threshold	5
em high threshold	4

Caveats

Equity multiplier of 14.3× is critically high. A small profitability decline gets amplified proportionally into ROE; this company is running with very thin margin of safety.