Abstract
Morgan Stanley will release its quarterly results on October 21, 2025, Pre-Market; this preview consolidates last quarter’s actuals and the latest forecasts through January 08, 2026 to frame revenue, margins, adjusted EPS, and segment drivers heading into the January 15, 2026 report.
Market Forecast
Consensus and company-compiled projections indicate Morgan Stanley’s current-quarter revenue at $17.53 billion, implying forecast year-over-year growth of 16.59%; the current-quarter adjusted EPS estimate is $2.42 with an estimated year-over-year increase of 42.89%, and EBIT is expected at $4.86 billion with an estimated year-over-year rise of 30.76%. Forecast gross margin and net profit margin are not formally guided; main business highlights point to steady fee-based flows and resilient institutional trading. We expect the most promising segment to be Asset Management as inflows stabilize, supported by wealth advisory cross-sell; last quarter segment revenue was $6.44 billion, and growth momentum remains constructive on improved markets and pipeline conversion.
Last Quarter Review
Morgan Stanley reported last quarter revenue of $18.22 billion, a gross profit margin of 87.60%, GAAP net profit attributable to the parent company of $4.61 billion, a net profit margin of 25.30%, and adjusted EPS of $2.80, with year-over-year growth in adjusted EPS of 48.94% and revenue growth of 18.47%. A notable highlight was the outperformance versus estimates, with revenue exceeding consensus by $1.53 billion and EBIT reaching $6.03 billion, reflecting stronger-than-expected trading and solid fee income. Main business performance was led by Interest Income at $15.46 billion, Asset Management at $6.44 billion, Trading at $5.02 billion, Investment Banking at $2.27 billion, and Commissions and Fees at $1.47 billion, while Interest Expense was $12.97 billion.
Current Quarter Outlook
Wealth and Investment Management
Wealth and Investment Management remains a key revenue foundation, anchored by fee-based advisory, asset allocation, and net new assets from stable client acquisition channels. With last quarter’s gross margin at 87.60%, the firm showed efficient cost throughput on fee revenue. The near-term setup benefits from higher average market levels through the fall, supporting management fees, and steady advisory revenue on ongoing client engagement. A favorable mix shift toward managed solutions and alternative allocations may help defend margin even if transactional volumes normalize. The pipeline of new accounts from integrated wealth platforms points to continued net inflows, forming a base for sequential revenue stability.
Institutional Securities and Trading
Trading and institutional activity sustained revenue momentum last quarter at $5.02 billion, with broad-based performance across fixed income and equities. For the current quarter, market volatility around rate expectations and credit spreads can sustain client activity, though absolute levels may moderate from the prior quarter’s strength. Execution quality and risk discipline are central to preserving the net profit margin of 25.30% seen last quarter, even as spreads and bid-ask levels evolve. Equity derivatives and macro trading can contribute meaningfully if dispersion remains elevated, while FICC normalization could temper the quarter-on-quarter pace. Overall, institutional franchises are well positioned to capture flow, with the forecast EPS of $2.42 and EBIT of $4.86 billion embedding a prudent performance baseline.
Investment Banking Advisory and Underwriting
The investment banking backdrop shows incremental recovery signs in underwriting and selective advisory mandates. Last quarter’s $2.27 billion in investment banking revenue provides a high base, yet deal timing and completion risk remain central swing factors for quarterly prints. If issuance windows stay open into earnings week, equity and debt underwriting could add to top-line consistency. Advisory revenue depends on close rates, and while the pipeline has improved, conversion often lags sentiment; this dynamic suggests modest contribution versus the prior quarter’s stronger breadth. Forecast revenue growth of 16.59% year-over-year for the quarter leaves room for upside if several large transactions finalize, but model assumptions appear appropriately balanced given macro sensitivity.
Asset Management Momentum
Asset Management at $6.44 billion last quarter remains the most promising lever for durable growth. Fee accruals benefit from higher average assets under management, and alternatives strategies, including private markets and multi-asset solutions, can diversify revenue drivers. Cross-sell between wealth advisory and asset management vehicles deepens client relationships and supports retention, potentially yielding incremental flow through year-end. Operating leverage in the platform should gradually improve as inflows compound, aiding margin stabilization even if performance fees fluctuate seasonally. The segment’s visibility, combined with consistent net new assets, underpins the quarter’s constructive EPS and revenue trajectory embedded in forecasts.
Factors Most Likely to Impact the Stock Price This Quarter
Revenue mix and margin trajectory are likely to be the central focus for investors, especially the interplay between fee-based wealth revenue and trading-driven institutional lines. Any deviation from the forecast adjusted EPS of $2.42 will be scrutinized in the context of operating efficiency and compensation accruals relative to activity levels. Segment disclosures around Asset Management inflows and institutional trading performance can sway sentiment, as they inform durability versus cyclicality in the earnings profile. Guidance color on expense discipline and capital deployment—particularly buybacks—may also influence near-term valuation frameworks. Lastly, macro developments in rates and credit could recalibrate activity assumptions, affecting both top-line and EBIT conversion toward the $4.86 billion forecast.
Analyst Opinions
Across institution previews gathered within the authorized window, the majority stance is cautiously bullish, citing above-consensus prior-quarter delivery and resilient fee engines leading into the January 15, 2026 print. Analysts highlight that the previous quarter’s surprise in revenue and EPS—adjusted EPS at $2.80 and revenue at $18.22 billion—sets a constructive baseline for the current-quarter estimates of $2.42 EPS and $17.53 billion revenue. The view emphasizes stable net new assets in wealth, improving issuance pipelines, and consistent trading execution as supportive factors for maintaining premium multiples. While risk flags include potential normalization in FICC revenues and deal timing, the majority argue that diversified businesses can absorb variability without materially undermining the EPS path implied by a 42.89% year-over-year increase.
Selected institutional commentary reflects this tilt toward a balanced, positive setup. Previews point to the durability of fee-based revenue and the breadth of institutional franchises in navigating intermittent market volatility. The consensus expectation for EBIT at $4.86 billion, with an estimated 30.76% year-over-year gain, is framed as achievable if asset management momentum and wealth inflows continue to offset any trading moderation. In aggregate, the ratio of bullish to bearish opinions skews positive, with supportive arguments concentrating on segment diversity, operating leverage in fee platforms, and healthy capital positioning, while bearish views focus mainly on the cadence of underwriting and performance fee variability. Given the majority stance, this preview centers on the constructive case: diversified revenue pillars and measured expense control are likely to sustain the earnings trajectory into October 21, 2025 and the forthcoming January 15, 2026 report.
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