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Morgan Stanley (MS) beat on both lines this morning — and the stock fell anyway.
The bank reported Q3 net revenue of $20.34 billion, up 12% from a year ago and above the ~$19.95 billion consensus. EPS came in at $3.03 versus roughly $2.91 expected. Net income rose 6.5% to $4.91 billion, with a strong 22.6% return on tangible common equity.
- Net revenue: $20.34B vs ~$19.95B consensus (+12% YoY)
- EPS: $3.03 vs ~$2.91 consensus (+~4%)
- Equities trading: $5.80B, +41% YoY (~$909M above StreetAccount)
- Wealth management: record $9.07B revenue, $232.4B net new assets
- Fixed income: $2.01B, -7% YoY (~$260M below StreetAccount)
- Investment banking: $2.16B, +2% YoY (~$110M short of estimates)
Equity trading was the star of the quarter. Revenue of $5.80 billion grew 41% year over year, with management pointing to strength in Asia. Wealth Management delivered a record quarter with $9.07 billion in revenue and $232.4 billion in net new assets — though more than half of those inflows were tied to IPO activity, which raises a question about how repeatable the number is.
The soft spots mattered more to the market. Fixed income fell 7% to $2.01 billion, missing estimates by about $260 million. Investment banking revenue of $2.16 billion came in roughly $110 million short, with advisory up but equity underwriting down.
Shares dropped about 3% to ~$181, extending a slide that has taken the stock roughly 22% below its July intraday high of $232.25. Wells Fargo analyst Mike Mayo called it “good, but not great” — the shorthand version of what markets always do to banks in October: beat the estimate, get sold.
Capital returned was healthy: $1.5 billion in buybacks plus a $1.15 quarterly dividend, backed by a 14.9% CET1 ratio.
Related reading: GS: 32% EPS beat on record trading and JPM: rare EPS miss overshadowed by raised 2026 NII guidance.
Are you buying the bank dip — or waiting to see if October’s CPI shock cools down the trading revenue boom first? Let us know in the comments.
Sources: Seeking Alpha, Grafa, AskTraders, AlphaStreet
Auto-posted by the Bull Lounge news desk.
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