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Morgan Stanley Shares Surge 34.5% YTD: Buy Now or Wait?
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Key Takeaways
MS stock has surged 34.5% YTD, supported by a rebound in global M&A activity.
Morgan Stanley is expanding wealth and asset management, thus increasing revenue diversification.
MS posted record Asia equity revenues and strengthened its liquidity position.
Morgan Stanley (MS - Free Report) shares have soared 34.5% this year, outperforming the industry, the Zacks Finance sector and the S&P 500 index. While it fared better than its peer JPMorgan (JPM - Free Report) , it lagged another peer, Goldman Sachs (GS - Free Report) .
YTD Price Performance
Image Source: Zacks Investment Research
Bullish investor sentiments toward Morgan Stanley are largely driven by a rebound in global mergers & acquisitions (M&As). Global M&As in the third quarter of 2025 were impressive, rebounding from the lows recorded in April and May following President Donald Trump’s announcement of sweeping tariffs. As corporates adapt to the rapidly evolving geopolitical and macroeconomic scenarios, deal-making activity has picked up.
Does M&A rebound make MS stock an attractive bet for your portfolio, or is the momentum unlikely to continue? Let’s find out.
Growth Drivers for Morgan Stanley
Increased Focus on Wealth & Asset Management Operations: Morgan Stanley has lowered its reliance on capital markets for income generation. It has now been focusing on expanding its wealth and asset management operations. The buyouts of Eaton Vance, E*Trade Financial and Shareworks are steps in this direction.
Further, in October, Morgan Stanley agreed to acquire EquityZen to tap the rapidly growing private markets landscape. These moves bolster the company’s diversification efforts, enhance stability and create a more balanced revenue stream across market cycles.
The wealth and asset management businesses’ aggregate contribution to total net revenues jumped to more than 55% in 2024 from 26% in 2010. In the first nine months of 2025, their aggregate contribution to net revenues was 53%.
The Wealth Management (WM) segment’s total client assets witnessed a five-year (2019-2024) compound annual growth rate (CAGR) of 18.1%, while the Investment Management (IM) segment’s total assets under management saw a CAGR of 24.7%. The uptrend for both metrics continued in the first nine months of 2025. The momentum is expected to continue as the operating environment becomes more favorable, given greater clarity on trade and tariffs.
Strategic Collaborations: MS’ partnership with Mitsubishi UFJ Financial Group, Inc. will likely continue to support its profitability. In 2023, the companies announced plans to deepen their 15-year alliance by merging certain operations within their Japanese brokerage joint ventures. The new partnership saw combined Japanese equity research, sales and execution services for institutional clients at Mitsubishi UFJ Morgan Stanley Securities and Morgan Stanley MUFG Securities. Also, their equity underwriting business has been rearranged between the two brokerage units. These efforts will solidify the company’s position in Japan’s market.
This has helped Morgan Stanley achieve record equity net revenues, particularly in Asia, through outperformance in prime brokerage and derivatives, led by solid client activity amid heightened volatility. The company’s Asia region revenues jumped 29% year over year to $7.27 billion in the first nine months of 2025.
Additionally, in September 2025, Jed Finn, head of wealth management at Morgan Stanley, stated in an interview with Bloomberg that the company collaborated with Zerohash, a cryptocurrency infrastructure provider, enabling E*TRADE clients to trade in popular cryptocurrencies starting in the first half of 2026.
The initiative is expected to boost Morgan Stanley’s revenues through trading spreads, advisory fees on crypto allocations and future services like custody and tokenization and improve client retention.
Robust Balance Sheet Position: As of Sept. 30, 2025, Morgan Stanley had long-term debt of $324.1 billion, with $25.4 billion expected to mature over the next 12 months. The company’s average liquidity resources were $368.1 billion as of the same date.
Morgan Stanley’s capital distribution plans have been impressive. Following the clearance of the 2025 stress test, it announced an 8% hike in quarterly dividend to $1.00 per share. It reauthorized a multi-year share repurchase program of up to $20 billion (no expiration date). The company has increased its dividend five times in the last five years, with an annualized growth rate of 20.4%.
Dividend Yield
Image Source: Zacks Investment Research
Given a solid liquidity position and earnings strength, Morgan Stanley is expected to be able to continue with efficient capital distribution activities, thereby enhancing shareholder value.
Similarly, JPMorgan has increased its quarterly dividend six times during the last five years, while Goldman has raised it five times during the same period. Also, JPM has a share repurchase plan of $50 billion (effective July 1, 2025) and Goldman has a buyback plan of $40 billion.
Morgan Stanley’s Earnings Prospects & Valuation Analysis
Analysts are bullish on Morgan Stanley. Over the past month, the Zacks Consensus Estimate for 2025 and 2026 earnings has been revised 3.6% and 2.6% upward to $9.76 and $10.32, respectively.
Estimate Revision Trend
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Morgan Stanley’s 2025 and 2026 earnings implies year-over-year growth of 22.8% and 5.8%, respectively.
From a valuation perspective, MS stock is currently trading at a forward 12-month price/earnings (P/E) of 16.45X, above the industry’s 14.43X. This indicates stretched valuation.
Forward 12-Month P/E
Image Source: Zacks Investment Research
Meanwhile, JPMorgan and Goldman Sachs have a 12-month forward P/E of 14.58X and 14.99X, respectively. This reflects that Morgan Stanley is expensive compared with its peers.
To Buy or Not to Buy Morgan Stanley Shares Now?
Morgan Stanley’s efforts to become less dependent on capital markets-driven revenues and inorganic expansion efforts/strategic alliances, along with declining interest rates, are expected to support its financials. Bullish analyst sentiments are another positive.
Further, Morgan Stanley’s growth initiatives have helped generate higher returns. This is demonstrated by the company’s return on equity (ROE) of 16.4% compared with the industry’s ROE of 12.54%.
Return on Equity
Image Source: Zacks Investment Research
On the other hand, JPMorgan and Goldman have delivered ROE of 17.18% and 15.29%, respectively, reflecting cumulative sectoral tailwind over the years.
However, rising expenses will likely hurt the company’s profitability in the near term. High reliance on trading revenues is another headwind. Further, a stretched valuation poses concern.
Nonetheless, an enhanced deal-making backdrop will likely drive Morgan Stanley’s financials. Also, supported by a solid balance sheet position, the company is expected to be able to meet near-term debt obligations, even if the economic situation worsens.
Hence, this seems to be the right time to buy Morgan Stanley shares before they soar further.
Image: Bigstock
Morgan Stanley Shares Surge 34.5% YTD: Buy Now or Wait?
Key Takeaways
Morgan Stanley (MS - Free Report) shares have soared 34.5% this year, outperforming the industry, the Zacks Finance sector and the S&P 500 index. While it fared better than its peer JPMorgan (JPM - Free Report) , it lagged another peer, Goldman Sachs (GS - Free Report) .
YTD Price Performance
Image Source: Zacks Investment Research
Bullish investor sentiments toward Morgan Stanley are largely driven by a rebound in global mergers & acquisitions (M&As). Global M&As in the third quarter of 2025 were impressive, rebounding from the lows recorded in April and May following President Donald Trump’s announcement of sweeping tariffs. As corporates adapt to the rapidly evolving geopolitical and macroeconomic scenarios, deal-making activity has picked up.
Does M&A rebound make MS stock an attractive bet for your portfolio, or is the momentum unlikely to continue? Let’s find out.
Growth Drivers for Morgan Stanley
Increased Focus on Wealth & Asset Management Operations: Morgan Stanley has lowered its reliance on capital markets for income generation. It has now been focusing on expanding its wealth and asset management operations. The buyouts of Eaton Vance, E*Trade Financial and Shareworks are steps in this direction.
Further, in October, Morgan Stanley agreed to acquire EquityZen to tap the rapidly growing private markets landscape. These moves bolster the company’s diversification efforts, enhance stability and create a more balanced revenue stream across market cycles.
The wealth and asset management businesses’ aggregate contribution to total net revenues jumped to more than 55% in 2024 from 26% in 2010. In the first nine months of 2025, their aggregate contribution to net revenues was 53%.
The Wealth Management (WM) segment’s total client assets witnessed a five-year (2019-2024) compound annual growth rate (CAGR) of 18.1%, while the Investment Management (IM) segment’s total assets under management saw a CAGR of 24.7%. The uptrend for both metrics continued in the first nine months of 2025. The momentum is expected to continue as the operating environment becomes more favorable, given greater clarity on trade and tariffs.
Strategic Collaborations: MS’ partnership with Mitsubishi UFJ Financial Group, Inc. will likely continue to support its profitability. In 2023, the companies announced plans to deepen their 15-year alliance by merging certain operations within their Japanese brokerage joint ventures. The new partnership saw combined Japanese equity research, sales and execution services for institutional clients at Mitsubishi UFJ Morgan Stanley Securities and Morgan Stanley MUFG Securities. Also, their equity underwriting business has been rearranged between the two brokerage units. These efforts will solidify the company’s position in Japan’s market.
This has helped Morgan Stanley achieve record equity net revenues, particularly in Asia, through outperformance in prime brokerage and derivatives, led by solid client activity amid heightened volatility. The company’s Asia region revenues jumped 29% year over year to $7.27 billion in the first nine months of 2025.
Additionally, in September 2025, Jed Finn, head of wealth management at Morgan Stanley, stated in an interview with Bloomberg that the company collaborated with Zerohash, a cryptocurrency infrastructure provider, enabling E*TRADE clients to trade in popular cryptocurrencies starting in the first half of 2026.
The initiative is expected to boost Morgan Stanley’s revenues through trading spreads, advisory fees on crypto allocations and future services like custody and tokenization and improve client retention.
Robust Balance Sheet Position: As of Sept. 30, 2025, Morgan Stanley had long-term debt of $324.1 billion, with $25.4 billion expected to mature over the next 12 months. The company’s average liquidity resources were $368.1 billion as of the same date.
Morgan Stanley’s capital distribution plans have been impressive. Following the clearance of the 2025 stress test, it announced an 8% hike in quarterly dividend to $1.00 per share. It reauthorized a multi-year share repurchase program of up to $20 billion (no expiration date). The company has increased its dividend five times in the last five years, with an annualized growth rate of 20.4%.
Dividend Yield
Image Source: Zacks Investment Research
Given a solid liquidity position and earnings strength, Morgan Stanley is expected to be able to continue with efficient capital distribution activities, thereby enhancing shareholder value.
Similarly, JPMorgan has increased its quarterly dividend six times during the last five years, while Goldman has raised it five times during the same period. Also, JPM has a share repurchase plan of $50 billion (effective July 1, 2025) and Goldman has a buyback plan of $40 billion.
Morgan Stanley’s Earnings Prospects & Valuation Analysis
Analysts are bullish on Morgan Stanley. Over the past month, the Zacks Consensus Estimate for 2025 and 2026 earnings has been revised 3.6% and 2.6% upward to $9.76 and $10.32, respectively.
Estimate Revision Trend
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Morgan Stanley’s 2025 and 2026 earnings implies year-over-year growth of 22.8% and 5.8%, respectively.
From a valuation perspective, MS stock is currently trading at a forward 12-month price/earnings (P/E) of 16.45X, above the industry’s 14.43X. This indicates stretched valuation.
Forward 12-Month P/E
Image Source: Zacks Investment Research
Meanwhile, JPMorgan and Goldman Sachs have a 12-month forward P/E of 14.58X and 14.99X, respectively. This reflects that Morgan Stanley is expensive compared with its peers.
To Buy or Not to Buy Morgan Stanley Shares Now?
Morgan Stanley’s efforts to become less dependent on capital markets-driven revenues and inorganic expansion efforts/strategic alliances, along with declining interest rates, are expected to support its financials. Bullish analyst sentiments are another positive.
Further, Morgan Stanley’s growth initiatives have helped generate higher returns. This is demonstrated by the company’s return on equity (ROE) of 16.4% compared with the industry’s ROE of 12.54%.
Return on Equity
Image Source: Zacks Investment Research
On the other hand, JPMorgan and Goldman have delivered ROE of 17.18% and 15.29%, respectively, reflecting cumulative sectoral tailwind over the years.
However, rising expenses will likely hurt the company’s profitability in the near term. High reliance on trading revenues is another headwind. Further, a stretched valuation poses concern.
Nonetheless, an enhanced deal-making backdrop will likely drive Morgan Stanley’s financials. Also, supported by a solid balance sheet position, the company is expected to be able to meet near-term debt obligations, even if the economic situation worsens.
Hence, this seems to be the right time to buy Morgan Stanley shares before they soar further.
At present, the company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.