To The Moon

$Morgan Stanley(MS)$ is scheduled to announce its fiscal Q2 2025 earnings on Wednesday, 16 July 2025, before the opening bell.

Earnings per Share (EPS): Analysts expect Morgan Stanley to report an EPS of $1.93, representing a year-over-year increase of 6%. However, there has been a slight downward revision of 0.7% in the consensus EPS estimate over the last 30 days.

Tipranks expected the earnings per share (EPS) to come in at $1.98.

Revenues: Total revenues are projected to reach $15.92 billion, also indicating a 6% increase from the year-ago quarter.

Segment-Specific Projections

Investment Management Net Revenues: Expected to be around $1.52 billion, a 9.5% year-over-year increase.

Institutional Securities Net Revenues: Forecasted at $7.43 billion, up 6.5% from the prior year.

Wealth Management Net Interest Income: Estimated at $1.87 billion, showing a 4.2% year-over-year change.

Total Non-Interest Revenues: Predicted to be $13.65 billion, a 5.4% year-over-year increase.

Morgan Stanley (MS) Last Earnings Call Was Positive

The earnings call highlighted Morgan Stanley's strong financial performance, with record revenues, EPS, and significant growth in wealth management and institutional securities. However, ongoing market uncertainties and geopolitical risks present challenges, particularly affecting strategic client activities and the potential slowdown in IPO and M&A activities.

Morgan Stanley (MS) Guidance

During Morgan Stanley's First Quarter 2025 Earnings Call, CEO Ted Pick highlighted the firm's robust financial performance, reporting $7.7 billion in revenue, an EPS of $2.60, and a 23% return on tangible equity. The firm successfully added $94 billion in net new assets, raising the total to $7.7 trillion. In equities, Morgan Stanley achieved a record $4.1 billion in revenue, marking a 45% increase from the previous year, while institutional securities delivered a record $9 billion in revenue, up 28% year-over-year. The CET1 ratio stood at 15.3%, providing a solid capital position.

Despite market volatility, Morgan Stanley maintained strong client engagement across segments, with wealth management generating $7.3 billion in revenue and $30 billion in fee-based flows. Asset management revenues increased by 15% to $4.4 billion, with total AUM reaching $1.6 trillion. The call emphasized Morgan Stanley's ability to navigate uncertain economic conditions and its commitment to capital management and client service.

Key Factors Expected to Impact Q2 2025 Earnings

Investment Banking (IB) Income:

Despite initial market plunges due to tariff announcements, deal-making activities reportedly resumed in the latter part of the quarter. This could lead to decent advisory fees for Morgan Stanley.

However, consensus estimates for advisory fees are pegged at $538 million, indicating a year-over-year decline of 9.1%.

Underwriting fees are also expected to decline, with fixed-income underwriting projected to fall 17% and equity underwriting 8%.

Overall, IB income is anticipated to decline by 8.1% year-over-year according to consensus, suggesting that while there might be signs of recovery in capital markets, a full rebound in M&A has yet to materialize.

Trading Revenues:

Morgan Stanley's trading business, a significant contributor to its top line, is expected to have performed strongly. This is attributed to increased client activity and market volatility during the quarter.

Equity trading revenues are projected to rise by 14.8% year-over-year to $3.46 billion, and fixed-income trading revenues are estimated to rally by 11.5% to $2.23 billion.

Net Interest Income (NII):

While the Federal Reserve kept interest rates unchanged, the overall lending scenario was good. Amid gradually stabilizing funding/deposit costs, Morgan Stanley's NII is expected to have improved, supported by higher rates and decent loan growth. The Zacks Consensus Estimate for net interest revenues is $2.27 billion, suggesting a 9.8% year-over-year rise.

Wealth Management:

Morgan Stanley's wealth management segment is expected to remain a stable revenue stream. Analysts project total client assets to reach $5962.28 billion, up from $5690.00 billion in the same quarter last year. Assets under management are also expected to show growth across various categories (liquidity and overlay services, fixed income, equity).

Net interest income for wealth management is expected to be relatively stable sequentially.

Expenses:

Cost reduction, a long-standing strategy for Morgan Stanley, is unlikely to have provided significant support in Q2 2025. The company has been investing in its franchises, which is anticipated to lead to elevated overall costs. Total non-interest expenses are expected to increase by 6.6% year-over-year to $11.6 billion.

Morgan Stanley (MS) Price Target

Based on 16 analysts from Tiger Brokers offering 12 month price targets for Morgan Stanley in the last 3 months. The average price target is $141.75 with a high forecast of $160.00 and a low forecast of $110.00. The average price target represents a 1.54% change from the last price of $143.97.

Technical Analysis - Exponential Moving Average (EMA)

MS is currently in a consolidation, though we can see that the bulls are in control and looking to continue to create the daily uptrend continuation.

The RSI momentum have been pretty consistent with strong and positive indication that this daily uptrend might continue into its earnings release, but if there is an slippage in the earnings result, we might see a decline.

Summary

Morgan Stanley is expected to deliver decent performance in Q2 2025, driven by robust trading revenues and growth in Net Interest Income, particularly in its wealth management segment. However, the Investment Banking division might face some headwinds, with expected declines in advisory and underwriting fees. Investors will be closely watching management commentary on the outlook for capital markets and credit quality.

While analysts project year-over-year growth in both EPS and revenue, some sources indicate a low chance of Morgan Stanley beating the Zacks Consensus Estimate for earnings, partly due to a negative Earnings ESP. The firm's diversified revenue base and strong client relationships are seen as long-term advantages.

Appreciate if you could share your thoughts in the comment section whether you think MS could provide a decent earnings performance with a positive outlook despite IB headwinds and NII expected to climb if rates remain steady.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.