Morgan Stanley reported third-quarter earnings of $3.03 per share, beating estimates as equities trading revenue surged 41%. Wealth management also posted record net new assets, though fixed income declined.
Morgan Stanley reported third-quarter results that exceeded analyst expectations, driven primarily by a significant increase in equities trading revenue. The financial services firm posted earnings per share of $3.03, surpassing the LSEG estimate of $2.91. Total revenue rose 12% to $20.34 billion, compared to the $19.95 billion estimate.
The firm’s equities trading division, a core component of its Institutional Securities segment, saw revenue increase by 41% year-over-year to $5.8 billion. This figure exceeded StreetAccount estimates by approximately $909 million. Morgan Stanley attributed this growth to widespread strength across products and regions, with particular strength noted in Asia.
"The company’s equities trading activity has done a lot of the heavy lifting for the bank’s third quarter overall," said Daniel Coatsworth, head of markets at AJ Bell.
However, other trading divisions faced headwinds. Fixed income trading revenue fell 7% to $2.01 billion, driven by declines in credit and commodities. This result was roughly $260 million below expectations. Investment banking revenue edged 2% higher to $2.16 billion, about $110 million below expectations, as increases in advisory revenue from completed mergers were offset by declines in equity and fixed income underwriting.
The Wealth Management division delivered record revenues of $9.1 billion, up 10% year-over-year. The unit attracted $232 billion in net new assets and $80 billion in fee-based flows during the quarter. According to BigGo Finance, slightly more than half of the net new assets came from IPO-related inflows, highlighting the bank's ability to capture wealth management demand following corporate listings.
Morgan Stanley CEO Ted Pick highlighted the firm's integrated approach in a statement. "Morgan Stanley reported another strong quarter with net revenues of $20.3 billion, EPS of $3.03 and a ROTCE of 22.6%," Pick said. "The Integrated Firm is connecting the full breadth of Morgan Stanley to deliver differentiated solutions and advice for our clients."
Despite the earnings beat, shares of Morgan Stanley declined in midday trading. Wells Fargo analyst Mike Mayo described the results as "good, but not great," noting that some business metrics showed slower improvement in the quarter.
CEO Ted Pick pointed to a complex macroeconomic environment, citing the interaction between AI-driven market activity and geopolitical tensions. "The interaction of the AI phenomenon and geopolitics has been the dominant reality the whole year," Pick said. "It’s really two very different stories, and I’d like to think that we are going to have the first narrative, the positive narrative, if we can get some control over the geopolitics."
Pick noted that market activity was exceptionally strong in July and August but slowed after Labor Day due to concerns over overseas conflict, inflation, and surging yields. He described himself as "cautiously optimistic" about the fourth quarter.
Morgan Stanley's results highlight the divergent performance within major banks during the third quarter of 2026. While equities trading and wealth management provided strong tailwinds, fixed income and investment banking faced pressure from volatile markets and a slowdown in global deal value. The firm's ability to leverage its wealth management franchise, particularly through IPO-related inflows, has become a critical stabilizer against cyclical trading fluctuations.
Sources
This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.
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