Latest Morgan Stanley Earnings Report Q1 2025

Company Overview

Morgan Stanley (NYSE: MS) is a leading global financial services firm that provides investment banking, securities, wealth management, and investment management services. Founded in 1935, the firm is headquartered in New York City and operates in over 41 countries, employing more than 80,000 individuals. Morgan Stanley's clients include corporations, governments, institutions, and individuals. The firm is organized into three primary business segments: Institutional Securities, Wealth Management, and Investment Management. In 2024, Morgan Stanley reported a net income of $12.8 billion, a 50% increase from the previous year, and revenues of $61.76 billion, reflecting a 14% growth. This performance was driven by a 36% increase in investment banking activities and a 15% rise in asset management revenues. The Wealth Management division saw client assets reach $6.2 trillion by the end of 2024, a 21% increase from the prior year. As of February 15, 2025, Morgan Stanley's stock price is $138.95.

Latest Morgan Stanley Earnings Comparison (Q1 2025)

Historical Morgan Stanley Earnings Data

Morgan Stanley Earnings Call Summary Q1 2025

Highlights

• Record Revenue & Profitability:

  • Revenue reached $17.7B, an all-time high, with EPS of $2.60 and ROTCE of 23%.

  • Institutional Securities delivered record revenue of $9B (+28% YoY); Equities revenue hit a record $4.1B (+45% YoY).

• Wealth Management Strength:

  • $94B in net new assets, including $30B in fee-based flows, bringing total client AUM to $7.7T.

  • Reported PBT margin of 26.6% in Wealth, despite DCP/severance-related headwinds.

• Investment Banking Recovery Signs:

  • Advisory revenue: $563M, driven by midsize M&A and sponsor activity.

  • Fixed income underwriting: $677M, supported by non-investment-grade issuance.

• Robust Trading Performance:

  • Fixed Income revenue of $2.6B and strong client engagement across macro/FX products.

  • Prime brokerage and derivatives saw record volumes and continued market share gains.

• International Growth:

  • Asia contributed 15% of firm revenue, +35% YoY, with growing strength in Japan, India, and China.

  • Global client demand for capital markets access, advice, and execution remained high.

• Capital Position & Shareholder Returns:

  • $1.9B CET1 capital accreted; CET1 ratio at 15.3%.

  • $1B in share repurchases during the quarter.

Risks

• Geopolitical & Macroeconomic Uncertainty:

  • Unpredictable fiscal, trade, and industrial policy creates hesitation in strategic activity.

  • Prolonged “pause” in dealmaking could turn into “delete” if volatility persists too long.

• Interest Rate & Market Sensitivity:

  • Banking pipeline and client activity remain contingent on macro clarity and stability.

  • Equity/fixed income volatility could dampen investor sentiment and new issuance.

• Stress Testing & Capital Requirements:

  • Disparity between regulatory stress test models and firm’s real-world performance challenges capital flexibility.

• Wealth Management Margin Pressure:

  • Severance and DCP costs, along with shifting deposit mix, could impact short-term margins.

• Regulatory Reform Uncertainty:

  • Potential changes to SLR, G-SIB, and CET1 regulations remain unresolved, affecting balance sheet planning.

Opportunities

• Equity Trading & Prime Brokerage Leadership:

  • Record performance driven by multi-year investment in technology, flow, and client diversification.

• M&A Pipeline & Sponsor Activity:

  • Strong sponsor activity continues; pipelines remain robust despite near-term delays.

  • High client engagement on M&A and capital structure strategies across sectors.

• Wealth Management Platform Scale:

  • Strong recruitment, self-directed growth via E*TRADE, and adviser-led flows fueling steady fee-based AUM expansion.

• Alternative Investments Expansion:

  • $200B+ in private alternatives; aim to grow toward 15% of qualified assets, supported by proprietary products.

• Global & Asia Growth Strategy:

  • Deepening MUFG partnership in Japan, scaling in India and Hong Kong, and growing European IB presence.

  • 17,500 employees in Asia, with increased board-level focus on international growth.

Outlook

• Capital Markets Momentum:

  • Morgan Stanley remains positioned to capture upside from eventual M&A and IPO rebound.

  • Equities and Fixed Income trading likely to remain strong if volatility is "orderly."

• Wealth & Asset Management Durability:

  • Continued asset gathering, cross-channel integration, and adviser growth support long-term fee income expansion.

• Disciplined Expense Management:

  • Ongoing headcount optimization and AI-driven automation to improve operating leverage.

  • Expense growth will be strategic and selective, not across the board.

• Client Engagement & Strategic Advice:

  • Strong client activity levels, particularly in Equities, SBL, and workplace transitions, expected to persist.

• Long-Term Strategic Focus:

  • Determined to be a durable global leader in institutional advice, capital raising, and wealth management.

The information is provided for educational purposes only and does not constitute financial advice or recommendation and should not be considered as such. Do your own research.