Morgan Stanley (NYSE:MS) Releases Earnings Results, Beats Estimates By $0.10 EPS

Morgan Stanley (NYSE:MS) posted its quarterly earnings results on Wednesday. The financial services provider reported $3.03 earnings per share for the quarter, topping the consensus estimate of $2.93 by $0.10, FiscalAI reports. Morgan Stanley had a return on equity of 19.40% and a net margin of 15.63%. The company had revenue of $20.34 billion during the quarter, compared to the consensus estimate of $19.93 billion. During the same quarter in the prior year, the company earned $2.80 EPS. The firm’s quarterly revenue was up 11.6% compared to the same quarter last year.

Here are the key takeaways from Morgan Stanley’s conference call:

• Strong third-quarter results: Morgan Stanley reported $20.3 billion in revenue, $3.03 in EPS and a 22.6% return on tangible common equity, marking its fifth consecutive quarter above 20%.
• Wealth management reached record levels, with $9.1 billion in revenue, $232 billion of net new assets, $80 billion in fee-based flows and total firm client assets of $10.5 trillion. Management expects the wealth business’s pre-tax margin to expand over time as scale and Workplace-to-advisor conversions increase.
• Institutional Securities revenue rose 18% year over year to $10 billion, led by a 41% increase in equities revenue to $5.8 billion. Management described investment-banking pipelines as robust and diversified, with strategic activity supported by AI infrastructure, corporate investment and portfolio repositioning.
• Management highlighted significant uncertainty entering the fourth quarter and 2027, including higher interest rates, energy prices and geopolitical conflicts, which have already moderated market volumes. Executives remain constructive on the AI capital-spending cycle but acknowledged risks of overbuilding, financing stress and uneven timing.
• Morgan Stanley ended the quarter with a 14.9% standardized CET1 ratio and roughly 300 basis points of excess capital, providing flexibility to support clients and invest in growth. Deposits rose nearly $30 billion sequentially, with management expecting the related bank-funding benefit to emerge over the course of 2027.

Morgan Stanley Trading Up 0.4%

Shares of MS opened at $182.25 on Friday. The firm’s 50 day simple moving average is $205.11 and its 200 day simple moving average is $203.64. The company has a market capitalization of $287.45 billion, a P/E ratio of 14.46, a P/E/G ratio of 1.21 and a beta of 1.22. The company has a debt-to-equity ratio of 3.65, a current ratio of 0.79 and a quick ratio of 0.79. Morgan Stanley has a 1-year low of $152.80 and a 1-year high of $232.25.

Morgan Stanley Dividend Announcement

The firm also recently disclosed a quarterly dividend, which will be paid on Friday, November 13th. Stockholders of record on Friday, October 30th will be issued a dividend of $1.15 per share. The ex-dividend date of this dividend is Friday, October 30th. This represents a $4.60 annualized dividend and a dividend yield of 2.5%. Morgan Stanley’s payout ratio is presently 37.19%.

Morgan Stanley News Roundup

Here are the key news stories impacting Morgan Stanley this week:

• Positive Sentiment: Morgan Stanley reported third-quarter earnings of $3.03 per share and revenue of $20.34 billion, exceeding estimates of $2.93 and $19.93 billion, respectively. Revenue increased 11.6% year over year. Morgan Stanley Q3 earnings report
• Positive Sentiment: Equities trading revenue surged 41% to help drive Institutional Securities revenue to $10.0 billion. Wealth Management also posted record revenue of $9.1 billion, added $232.4 billion in net new assets and reported $80.5 billion in fee-based asset flows. Morgan Stanley IPO and wealth management growth
• Positive Sentiment: Profitability remained strong, with return on tangible common equity above 20% for a fifth consecutive quarter. The company also repurchased $1.54 billion of stock, maintained a 14.9% standardized CET1 ratio and declared a quarterly dividend of $1.15 per share.
• Neutral Sentiment: Management highlighted further opportunities in artificial-intelligence financing, IPO activity and wealth management, but the quarter’s results were heavily supported by favorable equity-market and capital-markets conditions. Morgan Stanley Q3 earnings call highlights
• Negative Sentiment: Analysts trimmed their outlooks after the report. Citigroup lowered its price target from $210 to $190 and assigned a neutral rating; TD Cowen cut its target to $205 with a hold rating, while Keefe, Bruyette & Woods reduced its outperform target from $250 to $230. The revisions suggest much of the good news may already be reflected in the valuation.
• Negative Sentiment: Fixed-income trading was weaker amid volatile interest rates and a bond-market selloff, while higher expenses and concerns about the durability of trading-driven growth limited the market’s response to the earnings beat. Wall Street banks trading revenue report

Morgan Stanley declared that its board has authorized a stock buyback program on Wednesday, June 24th that authorizes the company to buy back $20.00 billion in shares. This repurchase authorization authorizes the financial services provider to reacquire up to 5.6% of its shares through open market purchases. Stock repurchase programs are often a sign that the company’s board of directors believes its stock is undervalued.

Wall Street Analyst Weigh In

A number of equities research analysts recently issued reports on the company. HSBC boosted their price objective on Morgan Stanley from $215.00 to $219.00 and gave the company a “hold” rating in a research note on Monday, September 28th. BMO Capital Markets cut their target price on shares of Morgan Stanley from $250.00 to $215.00 and set an “outperform” rating for the company in a research report on Tuesday, October 6th. Bank of America boosted their price target on shares of Morgan Stanley from $225.00 to $250.00 and gave the company a “buy” rating in a research report on Tuesday, July 7th. Royal Bank Of Canada dropped their price target on shares of Morgan Stanley from $243.00 to $195.00 and set a “sector perform” rating on the stock in a research note on Thursday. Finally, Jefferies Financial Group upgraded shares of Morgan Stanley from a “hold” rating to a “strong-buy” rating in a research note on Tuesday, July 7th. Two equities research analysts have rated the stock with a Strong Buy rating, eleven have assigned a Buy rating, thirteen have given a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat.com, the company currently has an average rating of “Moderate Buy” and an average target price of $214.71.

Morgan Stanley Company Profile

Morgan Stanley is a global financial services firm serving corporations, governments, financial institutions, individuals and other investors. The company provides investment banking and advisory services, including mergers and acquisitions advice, equity and debt underwriting, securities sales and trading, and corporate lending.

Through its Wealth Management business, Morgan Stanley offers financial planning, brokerage, investment advisory and banking services to individual investors, businesses and institutions.