$MS · MORGAN STANLEY
Morgan Stanley reported Q3 2026 net income of $4.75B ($3.03 diluted EPS), down 13% QoQ from $5.44B ($3.46) but up 7% YoY. Net revenues were $20.34B, down 5% sequentially. The standout: Wealth Management net new assets surged to $232.4B, nearly triple the year-ago $81.0B. Institutional Securities revenues fell 9% QoQ to $10.03B, driven by declines in equity trading (-8%) and fixed income (-18%).
- Q3 diluted EPS of $3.03 missed Q2's $3.46 by 12% and rose 8% YoY from $2.80.
- Wealth Management net new assets hit $232.4B, up 57% QoQ and 187% YoY from $81.0B.
- Institutional Securities net revenues fell 9% QoQ to $10.03B, with equity trading down 8% and fixed income down 18%.
- Total client assets reached $8.433 trillion, up 4% QoQ and 20% YoY.
- ROTCE compressed to 22.6% from 26.6% in Q2; CET1 ratio held steady at 14.9%.
Extended-hours trading shows MS at $185.67, down 0.53% from the regular close of $186.66. The sequential earnings decline and IS weakness are weighing on sentiment despite record wealth management inflows.
Morgan Stanley's Q3 reveals a tale of two franchises: record wealth management inflows ($232.4B) versus a sharp trading slowdown, with EPS missing Q2 by 12%.
Morgan Stanley's wealth management franchise continues to distance itself from pure-play investment banks, with $232.4B in net new assets dwarfing peers. However, the 9% QoQ Institutional Securities revenue decline mirrors trading slowdowns seen across Wall Street in Q3.
Provision for credit losses jumped 51% QoQ to $148M, concentrated in Institutional Securities ($141M). Investment Management performance-based income swung to negative $106M from positive $130M in Q2, signaling potential fund underperformance.
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