Morgan Stanley stock soared more than 3% during pre-market trading, after the financial titan posted earnings that were better than expected for its third quarter. This was largely due to a strong performance by its Investment Banking division.
This company’s profit exceeded analyst expectations, showing the power of its integrated business model and diverse segments.
Morgan Stanley’s earnings per share (EPS), for the quarter ending 30 September 2024, was $1.88. This exceeded the consensus estimate by $0.29.
It also reported revenues of $15,4 billion – a 15% increase over the previous year. Analysts had expected $14,32 billion.
Institutional Securities, a division of the company, led this charge with revenues up 20.2% on an annual basis to $6.8 Billion.
The growth in revenue was driven by a strong performance in equity trading and fixed income, as well as a surge of 56% in investment banking.
The boom in equity underwriting and fixed income securities played an important role in the gains.
Morgan Stanley’s Wealth Management division also reported impressive results. Its net revenue record of $7.3 billion was up 13.5 percent year over year.
This division has added $64 billion to its net assets. Total client assets now total $6 trillion.
Ted Pick, CEO of Morgan Stanley, commented on these results. He said, “Morgan Stanley’s strong third quarter results reflect its global footprint and our integrated business model that delivers high returns, while also growing capital.”
For the first quarter of 2024, the company recorded a Return On Tangible Common Equity of 18.2%.
Morgan Stanley also strengthened its financial position by adding $2.1 Billion in new capital and ending the quarter at a Standardized Common Equity Level 1 Capital Ratio of 15.1%.
Also, the company repurchased $0.8 billion of common stock. It also declared a $0.925 quarterly dividend per share.
MS stock: wealth management expansion
Morgan Stanley’s expansion into wealth management strategy, which was a top priority for former CEO James Gorman during his tenure, has continued to yield dividends.
Wealth management’s net revenue jumped to $7.27billion from $6.4billion a year ago, driven by asset management fees and high transactional fees.
Morgan Stanley is now closer to reaching its $10 trillion goal by managing the total client assets.
The revenue from investment management also increased, reaching $1.5 billion, compared with $1.3 billion for the same time period in last year. This is due to higher asset management fees.
Morgan Stanley stock is continuing to climb on the back of solid earnings. Investors are looking at how Morgan Stanley will leverage favorable market conditions, and continue growth in their wealth management and institutional security divisions.
The post Morgan Stanley beats Q3 earnings estimates and MS stocks jump 3% may be updated as new information becomes available.
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