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1. Company Snapshot

1.a. Company Description

Morgan Stanley, a financial holding company, provides various financial products and services to corporations, governments, financial institutions, and individuals in the Americas, Europe, the Middle East, Africa, and Asia.It operates through Institutional Securities, Wealth Management, and Investment Management segments.The Institutional Securities segment offers capital raising and financial advisory services, including services related to the underwriting of debt, equity, and other securities, as well as advice on mergers and acquisitions, restructurings, real estate, and project finance.


This segment also provides sales and trading services, such as sales, financing, prime brokerage, and market-making services in equity and fixed income products consisting of foreign exchange and commodities; corporate and commercial real estate loans, which provides secured lending facilities and financing for sales and trading customers, and asset-backed and mortgage lending; and wealth management services, investment, and research services.The Wealth Management segment offers financial advisor-led brokerage and investment advisory services; self-directed brokerage services; financial and wealth planning services; workplace services, including stock plan administration; annuity and insurance products; securities-based lending, residential real estate loans, and other lending products; banking; and retirement plan services to individual investors and small to medium-sized businesses and institutions.The Investment Management segment provides equity, fixed income, liquidity, and alternative/other products to benefit/defined contribution plans, foundations, endowments, government entities, sovereign wealth funds, insurance companies, and third-party fund sponsors and corporations through institutional and intermediary channels.


Morgan Stanley was founded in 1924 and is headquartered in New York, New York.

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1.b. Last Insights on MS

Morgan Stanley's recent performance has been driven by surging capital markets, trading gains, and wealth management growth. The company's Q3 earnings jumped 49% due to booming deal-making activity and strong trading. Analysts have boosted their forecasts following the upbeat Q3 earnings report, which beat Wall Street expectations across all divisions. A potential expansion into crypto trading and Power E*TRADE Pro could give Morgan Stanley a unique edge. Additionally, the company's strong dividend growth and future buybacks may justify its premium valuation.

1.c. Company Highlights

2. Morgan Stanley's Q3 2025 Earnings: A Strong Performance

Morgan Stanley generated record revenues of $18.2 billion and EPS of $2.80 in Q3 2025, with a robust return on tangible equity of 23.5%. The firm's capital markets flywheel is taking hold, driven by a favorable economic environment and a rebound in investment banking activity. Total client assets across wealth and investment management reached $8.9 trillion, up $1.3 trillion over the last year. The company's pretax margin hit 30.3% in a "reasonably friendly environment," as noted by CEO Ted Pick.

Publication Date: Oct -16

📋 Highlights
  • Record Revenues and EPS:: Morgan Stanley reported Q3 2025 revenues of $18.2 billion and EPS of $2.80, with a 23.5% return on tangible equity.
  • Client Assets Growth:: Total client assets across wealth and investment management reached $8.9 trillion, a $1.3 trillion increase year-over-year.
  • Wealth Management Performance:: Generated $8.2 billion in revenues with a 30.3% margin, adding $81 billion in net new assets and $42 billion in fee-based flows.
  • Capital Deployment:: Executed $1.1 billion in stock buybacks and maintained a CET1 ratio of 15.2%, prioritizing dividend stability and organic growth investments.
  • Investment Banking Momentum:: Institutional Securities revenue hit $8.5 billion, driven by strong equity and debt underwriting, with a robust $250 billion private markets portfolio.

Segment Performance

In Institutional Securities, revenues were $8.5 billion, with investment banking activity improving significantly, driven by equity and debt underwriting. The business delivered outstanding results across all three regions. In Wealth Management, revenues reached a record $8.2 billion, with a reported margin of 30.3%. The business added $81 billion of net new assets and $42 billion in fee-based flows in the quarter.

Investment Management and Capital Deployment

Investment Management also performed well, with long-term net inflows of $16.5 billion and total AUM reaching a record $1.8 trillion. The firm's standardized CET1 ratio stands at 15.2%, and it opportunistically bought back $1.1 billion of common stock in the quarter. Regarding capital deployment, Ted Pick notes that the dividend is sacrosanct, and buybacks will be opportunistic.

Valuation and Growth Prospects

With a P/TBV ratio of 2.36, Morgan Stanley's valuation appears reasonable, considering its strong profitability and growth prospects. Analysts estimate next year's revenue growth at 5.9%. The actual EPS of $2.80 beat estimates of $2.1, indicating a strong underlying business. The company's focus on generating strong returns for shareholders and advancing through $10 trillion in total client assets is expected to drive future growth.

Outlook and Conclusion

The investment banking backlog looks strong, with a realization pipeline that is beginning to materialize. The capital markets flywheel is working, with IPOs providing another lane for exit opportunities. Morgan Stanley's management team is optimistic about the company's prospects, with a focus on durability and prudent capital use. The company's excess capital is around 300 basis points relative to minimums, providing a buffer for potential market volatility.

3. NewsRoom

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Morgan Stanley Shares Surge 34.5% YTD: Buy Now or Wait?

Dec -03

Source: zacks.com

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Josh Brown's best stocks in the market: Morgan Stanley, Baker Hughes and Ciena

Dec -02

Source: youtube.com

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I Am Betting Big On This Near-Perfect 8%-Yielding Income Machine For Early Retirement

Dec -02

Source: seekingalpha.com

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Amid the Bitcoin pandemonium, on leading bank says investors need to get exposure

Dec -02

Source: proactiveinvestors.co.uk

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Wall Street Giant Fined €101M in Secretive Tax Scandal--12 Years in the Making

Nov -28

Source: gurufocus.com

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Morgan Stanley Remains A Dividend Idea To Hold Onto, As Assets Keep Flowing

Nov -27

Source: seekingalpha.com

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Morgan Stanley Is Firing On All Cylinders, Maintain Buy

Nov -27

Source: seekingalpha.com

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Market Today: Stocks Rally, Tesla Robotaxi and Nvidia Scrutiny

Nov -26

Source: gurufocus.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.58%)

6. Segments

Wealth Management (WM)

Expected Growth: 8.3%

Morgan Stanley Wealth Management's financial advisory services are driven by increasing demand for personalized investment strategies, growth in assets under management, and expanding digital capabilities, fueling a strong growth outlook for the segment.

Institutional Securities (IS)

Expected Growth: 8.2%

Morgan Stanley's Institutional Securities segment is expected to grow driven by increasing demand for investment banking services, strong trading performance, and strategic partnerships, as well as the firm's solid reputation in the industry.

Investment Management (IM)

Expected Growth: 11.4%

Morgan Stanley's Investment Management division is driven by increasing demand for diversified investment products, growing adoption of sustainable investing, and expanding presence in emerging markets.

Intersegment Eliminations

Expected Growth: 5.5%

Morgan Stanley's intercompany revenue eliminations are driven by increasing trade volumes and diversification of business segments, leading to a forecasted CAGR of 5.5%. Key drivers include growth in investment banking, asset management, and wealth management.

7. Detailed Products

Wealth Management

Morgan Stanley's Wealth Management division provides financial planning, investment management, and brokerage services to individual investors, families, and institutions.

Institutional Securities

Morgan Stanley's Institutional Securities division provides investment banking, equities, fixed income, and commodities trading services to corporations, governments, and institutional investors.

Investment Management

Morgan Stanley's Investment Management division offers a range of investment products and solutions, including mutual funds, exchange-traded funds, and alternative investments.

Morgan Stanley at Work

Morgan Stanley at Work provides financial solutions and benefits to employees of corporate clients, including stock plan administration, financial wellness, and retirement plan services.

8. Morgan Stanley's Porter Forces

Forces Ranking

Threat Of Substitutes

Morgan Stanley's investment banking and wealth management services have some substitutes, but they are not easily replaceable due to the company's strong brand and reputation.

Bargaining Power Of Customers

Morgan Stanley's customers have some bargaining power due to the availability of alternative financial services, but the company's diversified product offerings and strong brand loyalty mitigate this power.

Bargaining Power Of Suppliers

Morgan Stanley has a diverse range of suppliers, and no single supplier has significant bargaining power over the company.

Threat Of New Entrants

The financial services industry has high barriers to entry, and new entrants would face significant regulatory and capital requirements, making it difficult for them to compete with established players like Morgan Stanley.

Intensity Of Rivalry

The financial services industry is highly competitive, with many established players competing for market share, and Morgan Stanley faces intense rivalry from other investment banks and wealth management firms.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 73.62%
Debt Cost 10.92%
Equity Weight 26.38%
Equity Cost 10.92%
WACC 10.92%
Leverage 279.07%

11. Quality Control: Morgan Stanley passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Morgan Stanley

A-Score: 6.3/10

Value: 5.0

Growth: 5.8

Quality: 5.8

Yield: 5.0

Momentum: 8.5

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
Schwab

A-Score: 6.2/10

Value: 4.4

Growth: 5.3

Quality: 8.1

Yield: 2.0

Momentum: 8.5

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
Raymond James Financial

A-Score: 6.1/10

Value: 4.2

Growth: 5.6

Quality: 8.1

Yield: 2.0

Momentum: 8.0

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
Goldman Sachs

A-Score: 6.0/10

Value: 5.2

Growth: 5.1

Quality: 4.9

Yield: 4.0

Momentum: 8.5

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
Truist

A-Score: 5.8/10

Value: 4.8

Growth: 2.8

Quality: 5.5

Yield: 8.0

Momentum: 6.0

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
Prudential Financial

A-Score: 5.5/10

Value: 5.7

Growth: 3.4

Quality: 4.9

Yield: 8.0

Momentum: 2.0

Volatility: 9.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

176.51$

Current Price

176.51$

Potential

-0.00%

Expected Cash-Flows