Morgan Stanley’s third quarter was marked by robust performance across its core businesses, with revenues and earnings surpassing Wall Street expectations and the market responding positively. Management attributed the outperformance to strong execution within its integrated platform, citing momentum in both institutional securities and wealth management. CEO Ted Pick highlighted the firm’s “capital markets flywheel,” referencing renewed client engagement and increased activity in investment banking and equity underwriting. Sharon Yeshaya, CFO, pointed to the scale of Morgan Stanley’s wealth management franchise and record client assets as further evidence of the firm’s ability to capture growth across economic cycles.
Is now the time to buy MS? Find out in our full research report (it’s free for active Edge members).
Morgan Stanley (MS) Q3 CY2025 Highlights:
- Revenue: $18.22 billion vs analyst estimates of $16.7 billion (18.5% year-on-year growth, 9.2% beat)
- Adjusted EPS: $2.80 vs analyst estimates of $2.07 (35.3% beat)
- Adjusted Operating Income: $6.03 billion vs analyst estimates of $4.83 billion (33.1% margin, 24.7% beat)
- Operating Margin: 38.9%, up from 33% in the same quarter last year
- Market Capitalization: $253.3 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Morgan Stanley’s Q3 Earnings Call
- Dan Fannon (Jefferies) asked about the sustainability of current investment banking trends and backlog. CEO Ted Pick indicated optimism for ongoing growth but stressed that “the world is an uncertain place” and performance could fluctuate with macro and geopolitical shifts.
- Ebrahim Poonawala (Bank of America) questioned whether the wealth management pretax margin above 30% is sustainable. Pick emphasized continued investment in the business and suggested that future margins depend on operating leverage and business mix.
- Christian Bolu (Autonomous) asked about Morgan Stanley’s ability to benefit from wealth creation in private markets and technology sectors. CFO Sharon Yeshaya noted that while private markets are a growth opportunity, scaling client education and product offerings will take time.
- Brennan Hawken (Bank of Montreal) inquired about the expanded partnership with Carta and its impact on asset flows. Yeshaya explained that deeper engagement with private companies and founders should support future asset migration and advisory penetration.
- Glenn Schorr (Evercore) pushed management on whether excess capital will be used for higher growth investments or acquisitions. CEO Ted Pick reiterated a preference for organic investments, with inorganic opportunities considered only if they meet strict strategic and cultural criteria.
Catalysts in Upcoming Quarters
Over the coming quarters, the StockStory team will be monitoring (1) sustained improvement in investment banking advisory and underwriting pipelines, (2) the pace of net new asset growth and client migration within wealth management, and (3) the impact of artificial intelligence and digital tool deployment on both productivity and client engagement. Regulatory developments, capital allocation decisions, and further macroeconomic shifts will also be important factors shaping Morgan Stanley’s trajectory.
Morgan Stanley currently trades at $159.49, up from $155.40 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free for active Edge members).
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