Morgan Stanley tops estimates on better-than-expected wealth management, trading and banking results

Morgan Stanley topped analysts’ estimates for third quarter profit as each of its three main divisions generated more revenue than expected.

Here’s what the company reported:

• Earnings:$1.88 a share vs $1.58 LSEG estimate
• Revenue: $15.38 billion vs. $14.41 billion estimate

The bank said profit rose 32% to $3.2 billion, or $1.88 per share, and revenue jumped 16% to $15.38 billion.

Morgan Stanley had several tailwinds in its favor, starting with buoyant markets that helped its massive wealth management business, a rebound in investment banking after a dismal 2023, and strong trading activity. The Federal Reserve began taking down rates in the quarter, which should encourage more of the financing and merger activity that Wall Street firms can capitalize on.

“The Firm reported a strong third quarter in a constructive environment across our global footprint,” Morgan Stanley CEO Ted Pick said in the release.

The firm’s wealth management division saw revenue jump 14% from a year earlier to $7.27 billion, exceeding the StreetAccount estimate by nearly $400 million.

Equity trading revenue rose 21% to $3.05 billion, compared with the $2.77 billion estimate, while fixed income revenues edged 3% higher to $2 billion, also higher than the $1.85 billion estimate.

Investment banking revenue surged 56% from a year earlier to $1.46 billion, exceeding the $1.36 billion estimate.

Investment management, the firm’s smallest division, also exceeded expectations, posting a 9% increase in revenue to $1.5 billion, compared with the $1.42 billion estimate.

Shares of the bank advanced 2.8% in premarket trading.

Morgan Stanley’s Wall Street rivals also posted better-than-expected Wall Street revenue. JPMorgan Chase, Goldman Sachs and Citigroup topped estimates on strong revenue from trading and investment banking.

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