Morgan Stanley
MS · NYSE
Next quarter
Expected to report Jan 14, 2027 — estimated from last year’s reporting date.
Consensus is $2.93 EPS for Dec 2026 across 7 estimates, ranging $2.72 to $3.11.
MS Sep 2026
- 7.07%
- $2.83
- $3.03
- —
- —
Highlights
- Earnings beat: Third-quarter diluted EPS was $3.03, 7.1% above the $2.83 consensus; it was up 8% year over year but down 12% from $3.46 in Q2.
- Revenue and profit: Net revenue of $20.34 billion rose 12% year over year and fell 5% quarter over quarter; net income applicable to Morgan Stanley was $4.91 billion, up 6% year over year and down 12% sequentially.
- Wealth Management: Revenue increased 10% year over year to $9.07 billion, while net new assets rose to $232.4 billion from $81.0 billion a year earlier; total client assets reached $8.43 trillion.
- Institutional Securities: Revenue was $10.03 billion, up 18% year over year but down 9% sequentially. Equity trading rose 41% year over year, while investment banking revenue increased 2%.
- Investment Management: Revenue declined 12% year over year to $1.46 billion, with performance-based income and other at negative $106 million versus positive $117 million a year earlier.
- Costs and returns: Non-interest expenses were $13.71 billion, up 12% year over year; the firmwide expense efficiency ratio was 67%, and return on average common equity was 17.8%.
- Capital and credit: The standardized Common Equity Tier 1 ratio was 14.9%. Provision for credit losses was $148 million, compared with $98 million in Q2 and none in Q3 2025.
Analysis
Morgan Stanley reported Q3 2026 diluted EPS of $3.03, beating the $2.83 consensus by 7.1%. EPS was 8% above the year-ago $2.80 but 12% below Q2’s $3.46. Net revenue of $20.34 billion rose 12% year over year and declined 5% sequentially; net income applicable to Morgan Stanley was $4.91 billion, up 6% year over year and down 12% from $5.58 billion in Q2. Firmwide return on average common equity was 17.8%, versus 18.0% a year ago and 20.7% in the prior quarter.
The quarter’s resilience came from Wealth Management, where revenue grew 10% year over year and net new assets reached $232.4 billion, supporting total client assets of $8.43 trillion. Institutional Securities remained substantially above last year, led by equity trading and advisory, but its revenue fell 9% from Q2 as trading and underwriting moderated. Investment Management was the weakest segment: revenue fell 12% year over year, including a swing to negative performance-based income. Expenses increased 12% year over year, broadly matching revenue growth, while the expense efficiency ratio was 67%. The $148 million credit-loss provision was higher than both the prior quarter and the year-ago period.
Wealth Management flows
- Revenue: $9.07 billion, up 2% sequentially and 10% year over year. Asset management revenue rose 16% year over year to $5.54 billion, and net interest income increased 12% to $2.23 billion; transactional revenue declined 11% to $1.17 billion.
- Client assets and flows: Total client assets were $8.43 trillion, up 20% year over year. Net new assets of $232.4 billion compared with $148.1 billion in Q2 and $81.0 billion in Q3 2025; fee-based asset flows were $80.5 billion.
- Earnings and lending: Net income was $2.09 billion, down 1% sequentially but up 10% year over year. Wealth Management loans reached $201.1 billion, up 16% year over year, and deposits were $465 billion, up 17%.
Institutional Securities
- Revenue and earnings: Revenue of $10.03 billion was down 9% from Q2’s $11.04 billion but up 18% year over year. Net income was $2.64 billion, down 17% sequentially and up 7% year over year.
- Trading: Equity trading revenue was $5.80 billion, up 41% year over year; fixed-income trading revenue was $2.01 billion, down 7%. Both declined sequentially, by 8% and 18%, respectively.
- Investment banking: Revenue was $2.16 billion, up 2% year over year. Advisory increased 30% to $887 million, while underwriting declined 11% to $1.27 billion.
- Costs and credit: Non-interest expenses were $6.42 billion, 20% above the year-ago level, with non-compensation expenses up 30%. The segment recorded a $141 million credit provision, versus $71 million in Q2.
Investment Management
- Revenue mix: Revenue fell 12% year over year to $1.46 billion. Asset management and related fees edged up 2% to $1.57 billion, but performance-based income and other was negative $106 million, versus positive $117 million a year earlier and $130 million in Q2.
- Profitability: Net income of $190 million fell 29% year over year and 38% sequentially. Pre-tax margin narrowed to 18%, compared with 22% a year ago and 25% in Q2.
- Flows and assets: Total net flows were $44.3 billion, versus $47.2 billion a year earlier; long-term net flows were $15.8 billion. Assets under management or supervision totaled $2.05 trillion, up 13% year over year.
Costs and returns
Firmwide non-interest expenses were $13.71 billion, down 1% sequentially but up 12% year over year, against net revenue growth of 12% year over year. The expense efficiency ratio was 67%, level with Q3 2025 and higher than 65% in Q2. Compensation and benefits were 39% of revenue, compared with 41% a year earlier. Return on average common equity was 17.8%, while return on average tangible common equity was 22.6%; both were below Q2’s 20.7% and 26.6%, respectively.
Capital and credit
- Capital: The standardized CET1 ratio was 14.9%, unchanged from Q2 and compared with 15.1% a year earlier; the advanced-approach CET1 ratio was 16.3%, up from 16.2% in Q2 and 15.7% a year ago.
- Credit provision: The firm recorded $148 million for credit losses, up from $98 million in Q2 and no provision in Q3 2025. The Institutional Securities provision was $141 million and Wealth Management’s was $7 million.
- Balance sheet: Consolidated loans were $328.4 billion, up 18% year over year, and deposits were $478.4 billion, also up 18%. Average liquidity resources increased 20% year over year to $439.9 billion.
