Morgan Stanley’s revenue greater than doubled within the fourth quarter, fueled by a wave of dealmaking and inventory gross sales that drove its income to a full-year file.
The earnings rounded out a sturdy quarter for Wall Avenue banks, which benefited from a surge in mergers and acquisitions as a result of a powerful US economic system, interest-rate cuts and expectations of lighter regulation underneath incoming President Donald Trump.
It additionally wraps up a powerful first 12 months for CEO Ted Decide, who had received a three-man contest for the highest job. Decide stated 2024 was “one of the strongest years in the firm’s history” as Morgan Stanley garnered file web income of $61.8 billion.
The outlook for 2025 is optimistic, Decide advised analysts on a name on Thursday. “Values in the M&A pipelines are the highest in seven years, that is really encouraging. Some of this will be dependent on how things roll out in the first couple months of the incoming administration, and how things feel on a cross border basis, but the pent-up activity that we’re seeing is starting to release,” he stated.
The CEO additionally stated he’s ‘bullish’ on the potential for inventory gross sales, together with preliminary public choices.
The financial institution’s quarterly funding banking income rose 25% to $1.64 billion, led by charges from inventory gross sales, echoing outcomes at rivals Goldman Sachs and JPMorgan Chase on Wednesday.
Globally, funding banking income jumped 26% to $86.80 billion in 2024, in accordance with information from Dealogic. Wall Avenue CEOs and dealmakers anticipate extra giant offers to be authorized underneath the Trump administration than his predecessor Joe Biden.
Revenue greater than doubled from a 12 months in the past to $3.7 billion, or $2.22 per share, for the three months ended Dec. 31, in contrast with $1.5 billion, or 85 cents per share, a 12 months earlier. Analysts, on common, had anticipated $1.7 per share, in accordance with estimates compiled by LSEG.
Morgan Stanley shares closed up 4% at $135.81. Final 12 months, they have been among the many high performers within the large-cap banking class, gaining practically 50%.
Busier exercise throughout geographies, notably in Asia and the Americas, lifted its fairness buying and selling income by 22% to a file.
Ranking company Moody’s stated the outcomes have been credit score optimistic and mirrored an acceleration in buying and selling income and robust asset flows.
Moody’s senior analyst Mike Tayano stated the capital ratios elevated meaningfully relative to the prior quarter, “aided by both strong earnings growth and seasonally lower risk-weighted assets, further expanding its capital buffer to 240 basis points above its regulatory requirement.”
After the earnings launch, CFRA Analysis’s Kenneth Leon raised the 12-month goal worth for Morgan Stanley’s shares by $3 to $148. “We think Morgan Stanley benefits from favorable secular trends in the capital markets, wealth management, and investment banking,” he stated in a analysis observe.
Wealth administration
Morgan Stanley’s income from wealth administration rose 13% to $7.5 billion, helped by file income in asset administration.
The unit offers the financial institution with secure revenue, offsetting the volatility from funding banking and buying and selling.
The financial institution has set a goal of managing $10 trillion in shopper belongings and reached $7.9 trillion within the quarter.
Many of the web new belongings got here from monetary adviser relationships, Chief Monetary Officer Sharon Yeshaya stated. Morgan Stanley’s CFO expects new IPOs this 12 months to attract new belongings into the financial institution’s office division, which manages relationships for firm staff.
Income rose 26% to $16.2 billion within the fourth quarter, additionally beating expectations of $15 billion, in accordance with LSEG information.
