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Goldman or Morgan Stanley: Which Stock Is Better Bet Post Q3 Results?
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Key Takeaways
Goldman's investment banking fees jumped 40% y/y to $9.46B in the first nine months of 2026.
MS' wealth management revenues rose 13.4% y/y in the first nine months of 2026.
Goldman's lower forward P/E and stronger earnings growth prospects make it the preferred investment choice.
Wall Street heavyweights The Goldman Sachs Group, Inc. (GS - Free Report) and Morgan Stanley (MS - Free Report) continue to capitalize on improving investment banking (IB) activity, robust equities trading and growing demand for financial services. Both companies delivered impressive third-quarter 2026 results, reflecting their strong market positions and ability to navigate a dynamic operating environment.
The continued recovery in mergers and acquisitions (M&As), healthy underwriting activity, and strong institutional client engagement have supported their financial performances. While Goldman has demonstrated stronger IB revenue growth and trading momentum, Morgan Stanley continues to benefit from its diversified business model and expanding wealth management franchise. Against this backdrop, which IB powerhouse offers better investment prospects following the latest quarterly results? Let us examine.
The Case for GS
Goldman remains a dominant player in M&A advisory, underwriting and trading. The company's IB business has benefited significantly from improving global dealmaking activity and capital markets issuance. During the first nine months of 2026, IB fees jumped 40% year over year to $9.46 billion, supported by increases of 34%, 73% and 29% in advisory, equity underwriting and debt underwriting revenues, respectively.
Management continues to view the capital markets environment favorably, with opportunities arising from strategic dealmaking, technology investments and AI infrastructure financing. Although higher interest rates and macroeconomic uncertainties could affect deal activity, GS's leading market position and healthy pipeline position it well to capitalize on the ongoing investment banking recovery.
Goldman continues to streamline its operations by exiting non-core consumer banking businesses and strengthening its core franchises. The company is accelerating expansion in asset and wealth management to diversify its revenue sources and generate more durable fee-based income. In sync with these efforts, in August 2026, Goldman announced an agreement to acquire NEOS Investments, a provider of derivative income exchange-traded funds (ETFs). In April 2026, Goldman completed the acquisition of Innovator Capital Management, expanding its active exchange-traded fund (ETF) capabilities. Earlier, it completed the acquisition of Industry Ventures to strengthen its presence in venture capital and alternative investments. These initiatives complement its efforts to expand private market offerings and deepen client relationships.
The benefits of Goldman's strategic repositioning are increasingly evident in its financial performance. For the first nine months of 2026, GBM revenues jumped 34% to $41.72 billion, while AWM revenues rose 15% to $13.73 billion. Continued asset gathering and strategic acquisitions should support recurring fee income and reduce the dependence on market-sensitive businesses over time.
The Case for MS
Morgan Stanley continues to leverage its integrated business model, encompassing institutional securities, wealth management and investment management. The company has strategically diversified its revenue streams to reduce the dependence on volatile capital markets activities while benefiting from improving IB conditions.
The company's IB performance remained strong during the first nine months of 2026, with consolidated IB revenues increasing 30% year over year to $7.30 billion. The company is well-positioned to benefit from a healthier deal environment, supported by a robust and diversified pipeline across regions and sectors. Momentum is expanding beyond the Americas into Asia and EMEA, while active M&A and IPO markets, together with the company’s strong competitive position, are expected to support further growth as the macroeconomic backdrop evolves.
Morgan Stanley's strategic focus on expanding wealth and investment management operations remains a major strength. Acquisitions such as E*TRADE and Eaton Vance have enhanced its scale and diversified its business mix. Further, the acquisition of EquityZen, completed in January 2026, strengthened its private markets capabilities and offerings for corporate and wealth management clients.
The benefits of this transformation were evident in the first nine months of 2026. Wealth Management revenues increased 13.4% year over year to $26.44 billion. Moreover, the business attracted $498.9 billion in net new assets and $173.3 billion in fee-based asset flows during the first nine months of 2026. Wealth Management client assets reached $8.43 trillion as of September-end, up 19.5% year over year, while combined client assets across Wealth and Investment Management stood at $10.5 trillion, highlighting the growing scale of Morgan Stanley's wealth management franchise. This expanding client asset base provides Morgan Stanley with significant opportunities to generate recurring fee revenues and deepen client engagement.
GS & MS: Price Performance, Valuation & Other Comparisons
Over the past year, Goldman shares have gained 10.9%, outperforming Morgan Stanley’s 8.1% rise. In comparison, the industry has returned 3.3%.
Price Performance
Image Source: Zacks Investment Research
From a valuation perspective, Goldman appears relatively attractive. Its forward price-to-earnings (P/E) ratio stands at 11.94X, below Morgan Stanley's 13.56X. The valuation discount suggests that Goldman offers a relatively attractive entry point, particularly given its stronger recent earnings growth.
Price-to-Earnings F12M
Image Source: Zacks Investment Research
In terms of shareholder returns, both companies continue to prioritize dividends and share repurchases. Following the Federal Reserve's 2026 stress test, GS increased its quarterly common stock dividend 11% to $5 per share. Similarly, in July, the company increased its quarterly dividend 15% to $1.15 per share. Morgan Stanley offers a dividend yield of 2.56% compared with Goldman's 2.28%.
Dividend Yield
Image Source: Zacks Investment Research
How Do Earnings Prospects Compare for GS & MS?
The Zacks Consensus Estimate for GS’ 2026 and 2027 earnings indicate 38.1% and 4.3% growth, respectively. Earnings estimates for both years have been revised upward over the past month.
Estimate Revision Trend
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for MS’ 2026 and 2027 earnings indicate 25.7% and 3.9% growth, respectively. Earnings estimates for both years have been revised upward over the past month.
Estimate Revision Trend
Image Source: Zacks Investment Research
GS or MS: Which IB Stock Is a Smarter Bet?
Both Goldman and Morgan Stanley remain well-positioned to benefit from the recovery in investment banking activity and growing demand for asset and wealth management services.
Goldman's strong IB franchise, solid equities trading performance and strategic initiatives to expand its asset and wealth management operations should continue to support earnings growth. Its attractive valuation relative to Morgan Stanley offers a potential margin of safety, although elevated expenses and capital markets volatility remain concerning.
Morgan Stanley, by contrast, offers greater earnings diversification, supported by its expanding wealth management franchise, recurring fee income and strong client asset inflows. Its superior dividend yield and solid capital position make it an attractive option for investors seeking a combination of growth and shareholder returns. However, its relatively expensive valuation could limit near-term upside.
Overall, Goldman appears to be the more compelling investment choice at current levels. Its stronger earnings momentum, greater exposure to recovering investment banking activity and relatively favorable valuation position it for potentially higher returns.
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Goldman or Morgan Stanley: Which Stock Is Better Bet Post Q3 Results?
Key Takeaways
Wall Street heavyweights The Goldman Sachs Group, Inc. (GS - Free Report) and Morgan Stanley (MS - Free Report) continue to capitalize on improving investment banking (IB) activity, robust equities trading and growing demand for financial services. Both companies delivered impressive third-quarter 2026 results, reflecting their strong market positions and ability to navigate a dynamic operating environment.
The continued recovery in mergers and acquisitions (M&As), healthy underwriting activity, and strong institutional client engagement have supported their financial performances. While Goldman has demonstrated stronger IB revenue growth and trading momentum, Morgan Stanley continues to benefit from its diversified business model and expanding wealth management franchise. Against this backdrop, which IB powerhouse offers better investment prospects following the latest quarterly results? Let us examine.
The Case for GS
Goldman remains a dominant player in M&A advisory, underwriting and trading. The company's IB business has benefited significantly from improving global dealmaking activity and capital markets issuance. During the first nine months of 2026, IB fees jumped 40% year over year to $9.46 billion, supported by increases of 34%, 73% and 29% in advisory, equity underwriting and debt underwriting revenues, respectively.
Management continues to view the capital markets environment favorably, with opportunities arising from strategic dealmaking, technology investments and AI infrastructure financing. Although higher interest rates and macroeconomic uncertainties could affect deal activity, GS's leading market position and healthy pipeline position it well to capitalize on the ongoing investment banking recovery.
Goldman continues to streamline its operations by exiting non-core consumer banking businesses and strengthening its core franchises. The company is accelerating expansion in asset and wealth management to diversify its revenue sources and generate more durable fee-based income. In sync with these efforts, in August 2026, Goldman announced an agreement to acquire NEOS Investments, a provider of derivative income exchange-traded funds (ETFs). In April 2026, Goldman completed the acquisition of Innovator Capital Management, expanding its active exchange-traded fund (ETF) capabilities. Earlier, it completed the acquisition of Industry Ventures to strengthen its presence in venture capital and alternative investments. These initiatives complement its efforts to expand private market offerings and deepen client relationships.
The benefits of Goldman's strategic repositioning are increasingly evident in its financial performance. For the first nine months of 2026, GBM revenues jumped 34% to $41.72 billion, while AWM revenues rose 15% to $13.73 billion. Continued asset gathering and strategic acquisitions should support recurring fee income and reduce the dependence on market-sensitive businesses over time.
The Case for MS
Morgan Stanley continues to leverage its integrated business model, encompassing institutional securities, wealth management and investment management. The company has strategically diversified its revenue streams to reduce the dependence on volatile capital markets activities while benefiting from improving IB conditions.
The company's IB performance remained strong during the first nine months of 2026, with consolidated IB revenues increasing 30% year over year to $7.30 billion. The company is well-positioned to benefit from a healthier deal environment, supported by a robust and diversified pipeline across regions and sectors. Momentum is expanding beyond the Americas into Asia and EMEA, while active M&A and IPO markets, together with the company’s strong competitive position, are expected to support further growth as the macroeconomic backdrop evolves.
Morgan Stanley's strategic focus on expanding wealth and investment management operations remains a major strength. Acquisitions such as E*TRADE and Eaton Vance have enhanced its scale and diversified its business mix. Further, the acquisition of EquityZen, completed in January 2026, strengthened its private markets capabilities and offerings for corporate and wealth management clients.
The benefits of this transformation were evident in the first nine months of 2026. Wealth Management revenues increased 13.4% year over year to $26.44 billion. Moreover, the business attracted $498.9 billion in net new assets and $173.3 billion in fee-based asset flows during the first nine months of 2026. Wealth Management client assets reached $8.43 trillion as of September-end, up 19.5% year over year, while combined client assets across Wealth and Investment Management stood at $10.5 trillion, highlighting the growing scale of Morgan Stanley's wealth management franchise. This expanding client asset base provides Morgan Stanley with significant opportunities to generate recurring fee revenues and deepen client engagement.
GS & MS: Price Performance, Valuation & Other Comparisons
Over the past year, Goldman shares have gained 10.9%, outperforming Morgan Stanley’s 8.1% rise. In comparison, the industry has returned 3.3%.
Price Performance
Image Source: Zacks Investment Research
From a valuation perspective, Goldman appears relatively attractive. Its forward price-to-earnings (P/E) ratio stands at 11.94X, below Morgan Stanley's 13.56X. The valuation discount suggests that Goldman offers a relatively attractive entry point, particularly given its stronger recent earnings growth.
Price-to-Earnings F12M
Image Source: Zacks Investment Research
In terms of shareholder returns, both companies continue to prioritize dividends and share repurchases. Following the Federal Reserve's 2026 stress test, GS increased its quarterly common stock dividend 11% to $5 per share. Similarly, in July, the company increased its quarterly dividend 15% to $1.15 per share. Morgan Stanley offers a dividend yield of 2.56% compared with Goldman's 2.28%.
Dividend Yield
Image Source: Zacks Investment Research
How Do Earnings Prospects Compare for GS & MS?
The Zacks Consensus Estimate for GS’ 2026 and 2027 earnings indicate 38.1% and 4.3% growth, respectively. Earnings estimates for both years have been revised upward over the past month.
Estimate Revision Trend
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for MS’ 2026 and 2027 earnings indicate 25.7% and 3.9% growth, respectively. Earnings estimates for both years have been revised upward over the past month.
Estimate Revision Trend
Image Source: Zacks Investment Research
GS or MS: Which IB Stock Is a Smarter Bet?
Both Goldman and Morgan Stanley remain well-positioned to benefit from the recovery in investment banking activity and growing demand for asset and wealth management services.
Goldman's strong IB franchise, solid equities trading performance and strategic initiatives to expand its asset and wealth management operations should continue to support earnings growth. Its attractive valuation relative to Morgan Stanley offers a potential margin of safety, although elevated expenses and capital markets volatility remain concerning.
Morgan Stanley, by contrast, offers greater earnings diversification, supported by its expanding wealth management franchise, recurring fee income and strong client asset inflows. Its superior dividend yield and solid capital position make it an attractive option for investors seeking a combination of growth and shareholder returns. However, its relatively expensive valuation could limit near-term upside.
Overall, Goldman appears to be the more compelling investment choice at current levels. Its stronger earnings momentum, greater exposure to recovering investment banking activity and relatively favorable valuation position it for potentially higher returns.
At present, Goldman carries a Zacks Rank #2 (Buy) while Morgan Stanley carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.