Morgan Stanley's Q1 'Delivers A Home Run' With Strength In Investment Banking, Trading
Morgan Stanley (NYSE:MS) shares tanked in early trading on Thursday, despite the company reporting upbeat first-quarter results on Wednesday.
• Morgan Stanley stock is facing resistance. What is going on with MS?
Here are the key analyst insights:
- RBC Capital Markets analyst Gerard Cassidy maintained a Sector Perform rating and price target of $207.
- Citizens JMP Securities analyst Devin Ryan reiterated a Market Perform rating on the stock.
Check out other analyst stock ratings.
RBC Capital Markets: Morgan Stanley delivers a home run with "a record quarter by virtually every measure," Cassidy said in a note. The company's earnings grew 32% year-on-year in the first quarter to $3.43 per share, while net revenues grew 16% year-on-year to a record high of $20.6 billion, he added.
Reported ROTCE (return on tangible common equity) expanded by 410 basis point (bps) to 27.1%, from 23% in the first quarter of 2025, making this the highest ROTCE among the large U.S. universal banks and a "powerful validation of the Integrated Firm strategy of connecting Institutional Securities, Wealth Management, and Investment Management into a unified flywheel of earnings power," the analyst wrote.
Following the results, RBC Capital Markets raised its 2026 and 2027 earnings estimates for Morgan Stanley from $12 per share to $12.10 per share and from $12.60 per share to $12.80 per share, respectively.
Citizens JMP Securities: Morgan Stanley was able to beat high expectations, with earnings of $3.43 per share and net revenues of $20.6 billion coming in higher than consensus estimates of $2.98 per share and $19.7 billion, respectively, Ryan said. Institutional Trading revenue grew 16% year-on-year to a record of $8.6 billion, while Investment Banking revenues grew 36% year-on-year to $2.1 billion, he added.
Morgan Stanley's outlook indicates "gradual unit cost improvement and incremental operating leverage as revenues grow, rather than a shift toward aggressive cost-cutting," the analyst wrote. He added that the outlook provided confidence and addressed "several macro overhangs."
MS Price Action: Shares of Morgan Stanley had declined by 1.69% to $188.35 at the time of publication on Thursday.
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