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MS Q3 Earnings Beat Estimates on Equity Trading and Wealth Growth
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Key Takeaways
MS reported Q3 earnings of $3.03 per share, beating estimates, as net revenues rose 11.6% to $20.34 billion.
Equity revenues surged 40.9% to $5.8 billion, driving a 17.7% rise in Institutional Securities revenues.
Wealth Management revenues hit a record $9.07 billion, while total client assets rose to $8.43 trillion.
Morgan Stanley’s (MS - Free Report) third-quarter 2026 earnings of $3.03 per share topped the Zacks Consensus Estimate of $2.83. The bottom line rose 8.2% from the year-ago quarter.
Net income applicable to the company increased 6.5% to $4.91 billion.
Net revenues rose 11.6% year over year to $20.34 billion, surpassing the consensus estimate of $19.74 billion.
Total non-interest revenues increased 8.6% year over year to $17.09 billion. Trading revenues climbed 11.6% to $5.60 billion, while consolidated investment banking (IB) revenues grew 4.2% to $2.36 billion. Commissions and fees increased to $1.67 billion from $1.47 billion. Net interest income (NII) surged 30.5% to $3.25 billion.
Morgan Stanley's Costs Rise With Business Activity
Total non-interest expenses increased 12.4% year over year to $13.71 billion. Compensation and benefits costs climbed 7.5% to $8 billion, reflecting higher revenues across the business.
Non-compensation expenses rose 20.2% to $5.72 billion. Brokerage, clearing and exchange fees increased 28.6% to $1.47 billion, while information processing and communications costs jumped 16.4% to $1.3 billion.
The expense efficiency ratio was 67%, unchanged from the prior-year quarter, while the firmwide pre-tax margin declined to 32% from 33%.
MS Institutional Securities Gains From Equity Activity
Institutional Securities net revenues increased 17.7% year over year to $10.03 billion. Equity revenues surged 40.9% to $5.8 billion on robust client engagement across businesses and regions, particularly in Asia. Advisory revenues climbed 29.7% to $887 million, reflecting increased completed merger and acquisition activity in the Americas.
The gains were partly offset by a 7.3% decline in fixed-income revenues to $2.01 billion, stemming from weaker credit and commodities performance. Equity underwriting revenues fell 19.5% to $525 million, while fixed income underwriting revenues declined 3.2% to $747 million.
Segment pre-tax income improved 9.1% to $3.47 billion, although the pre-tax margin narrowed to 35% from 37%.
Morgan Stanley's Wealth Business Hits Revenue Record
Wealth Management net revenues rose 10.1% year over year to a record $9.07 billion. Asset management revenues jumped 15.8% to $5.54 billion on higher market levels and accumulated fee-based flows. NII increased 11.9% to $2.23 billion, benefiting from lending growth and higher average sweep deposits.
As of Sept. 30, 2026, total client assets reached $8.43 trillion, up 19.5% year over year. Fee-based client assets grew to $3.16 trillion, while fee-based flows surged to $80.5 billion from $41.9 billion.
The segment generated record pre-tax income of $2.75 billion and a pre-tax margin of 30.4%.
MS Investment Management Faces Performance Fee Pressure
Investment Management net revenues declined 11.6% year over year to $1.46 billion. Asset management and related fees increased 2% to $1.57 billion, aided by higher average assets under management. However, performance-based income and other revenues swung to a loss of $106 million from income of $117 million, reflecting a reversal of accrued carried interest tied primarily to investments in a private fund.
Assets under management or supervision rose 13.2% to $2.05 trillion as of Sept. 30, 2026. Long-term net inflows totaled $15.8 billion, with positive fixed-income and alternatives flows partly offset by equity outflows.
Segment pre-tax income fell 28.8% to $259 million.
Morgan Stanley Share Repurchase Update
MS repurchased $1.54 billion of common stock during the quarter compared with $1.09 billion a year earlier.
Our View on Morgan Stanley
The decent IB business performance and an impressive deal-making pipeline are expected to support Morgan Stanley’s financials. Efforts to become less dependent on capital markets-driven revenues and inorganic expansion/strategic alliances will boost top-line growth. However, elevated expenses and volatile trading revenues are concerns.
Goldman Sachs’ (GS - Free Report) third-quarter 2026 earnings per share were $17.01, which topped the Zacks Consensus Estimate by 31.9%. The metric also jumped 39% from $12.25 a year ago.
Driven by market volatility, Goldman posted record net revenues in Equities, while its fixed income, currencies and commodities revenues were relatively stable. A solid deal-making activity led to robust growth in IB fees. The company’s Asset & Wealth Management division posted solid revenue growth. However, a rise in expenses was an undermining factor.
JPMorgan (JPM - Free Report) posted third-quarter 2026 adjusted earnings of $5.75 per share, which missed the Zacks Consensus Estimate of $5.94. After considering the net investment securities losses of 18 cents, earnings were $5.57 per share, up 9.9% from the year ago.
Strong equity markets and IB activity powered core growth, while NII got support from decent loan demand. Lower provisions also offered support. However, an increase in operating expenses and lower fixed income markets revenues were the undermining factors for JPMorgan.
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MS Q3 Earnings Beat Estimates on Equity Trading and Wealth Growth
Key Takeaways
Morgan Stanley’s (MS - Free Report) third-quarter 2026 earnings of $3.03 per share topped the Zacks Consensus Estimate of $2.83. The bottom line rose 8.2% from the year-ago quarter.
Net income applicable to the company increased 6.5% to $4.91 billion.
Net revenues rose 11.6% year over year to $20.34 billion, surpassing the consensus estimate of $19.74 billion.
Total non-interest revenues increased 8.6% year over year to $17.09 billion. Trading revenues climbed 11.6% to $5.60 billion, while consolidated investment banking (IB) revenues grew 4.2% to $2.36 billion. Commissions and fees increased to $1.67 billion from $1.47 billion. Net interest income (NII) surged 30.5% to $3.25 billion.
Morgan Stanley's Costs Rise With Business Activity
Total non-interest expenses increased 12.4% year over year to $13.71 billion. Compensation and benefits costs climbed 7.5% to $8 billion, reflecting higher revenues across the business.
Non-compensation expenses rose 20.2% to $5.72 billion. Brokerage, clearing and exchange fees increased 28.6% to $1.47 billion, while information processing and communications costs jumped 16.4% to $1.3 billion.
The expense efficiency ratio was 67%, unchanged from the prior-year quarter, while the firmwide pre-tax margin declined to 32% from 33%.
MS Institutional Securities Gains From Equity Activity
Institutional Securities net revenues increased 17.7% year over year to $10.03 billion. Equity revenues surged 40.9% to $5.8 billion on robust client engagement across businesses and regions, particularly in Asia. Advisory revenues climbed 29.7% to $887 million, reflecting increased completed merger and acquisition activity in the Americas.
The gains were partly offset by a 7.3% decline in fixed-income revenues to $2.01 billion, stemming from weaker credit and commodities performance. Equity underwriting revenues fell 19.5% to $525 million, while fixed income underwriting revenues declined 3.2% to $747 million.
Segment pre-tax income improved 9.1% to $3.47 billion, although the pre-tax margin narrowed to 35% from 37%.
Morgan Stanley's Wealth Business Hits Revenue Record
Wealth Management net revenues rose 10.1% year over year to a record $9.07 billion. Asset management revenues jumped 15.8% to $5.54 billion on higher market levels and accumulated fee-based flows. NII increased 11.9% to $2.23 billion, benefiting from lending growth and higher average sweep deposits.
As of Sept. 30, 2026, total client assets reached $8.43 trillion, up 19.5% year over year. Fee-based client assets grew to $3.16 trillion, while fee-based flows surged to $80.5 billion from $41.9 billion.
The segment generated record pre-tax income of $2.75 billion and a pre-tax margin of 30.4%.
MS Investment Management Faces Performance Fee Pressure
Investment Management net revenues declined 11.6% year over year to $1.46 billion. Asset management and related fees increased 2% to $1.57 billion, aided by higher average assets under management. However, performance-based income and other revenues swung to a loss of $106 million from income of $117 million, reflecting a reversal of accrued carried interest tied primarily to investments in a private fund.
Assets under management or supervision rose 13.2% to $2.05 trillion as of Sept. 30, 2026. Long-term net inflows totaled $15.8 billion, with positive fixed-income and alternatives flows partly offset by equity outflows.
Segment pre-tax income fell 28.8% to $259 million.
Morgan Stanley Share Repurchase Update
MS repurchased $1.54 billion of common stock during the quarter compared with $1.09 billion a year earlier.
Our View on Morgan Stanley
The decent IB business performance and an impressive deal-making pipeline are expected to support Morgan Stanley’s financials. Efforts to become less dependent on capital markets-driven revenues and inorganic expansion/strategic alliances will boost top-line growth. However, elevated expenses and volatile trading revenues are concerns.
Morgan Stanley Price, Consensus and EPS Surprise
Morgan Stanley price-consensus-eps-surprise-chart | Morgan Stanley Quote
Currently, Morgan Stanley carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Morgan Stanley’s Peers
Goldman Sachs’ (GS - Free Report) third-quarter 2026 earnings per share were $17.01, which topped the Zacks Consensus Estimate by 31.9%. The metric also jumped 39% from $12.25 a year ago.
Driven by market volatility, Goldman posted record net revenues in Equities, while its fixed income, currencies and commodities revenues were relatively stable. A solid deal-making activity led to robust growth in IB fees. The company’s Asset & Wealth Management division posted solid revenue growth. However, a rise in expenses was an undermining factor.
JPMorgan (JPM - Free Report) posted third-quarter 2026 adjusted earnings of $5.75 per share, which missed the Zacks Consensus Estimate of $5.94. After considering the net investment securities losses of 18 cents, earnings were $5.57 per share, up 9.9% from the year ago.
Strong equity markets and IB activity powered core growth, while NII got support from decent loan demand. Lower provisions also offered support. However, an increase in operating expenses and lower fixed income markets revenues were the undermining factors for JPMorgan.