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

Morgan Stanley topped analysts’ estimates for third quarter profit as its wealth management, trading and investment banking operations 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’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 to the $2.77 billion estimate, while fixed income revenues edged 3% higher to $2 billion, also higher than the $1.85 billion estimate.

Morgan Stanley had several tailwinds in its favor in the quarter. The bank’s massive wealth management business was helped by high stock market values in the quarter, which inflates the management fees the bank collects.

Investment banking has rebounded after a dismal 2023, a trend that may continue as easing rates will encourage more financing and merger activity.

Finally, its Wall Street rivals have posted better-than-expected trading results, making it unlikely that the firm missed out on elevated activity.

JPMorgan Chase, Goldman Sachs and Citigroup topped expectations, helped by better-than-expected revenue from trading or investment banking.

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