Jamie Spencer
Morgan Stanley delivered better-than-expected results for the third quarter of 2024, surpassing analysts’ forecasts for profit and revenue as each of its key divisions performed strongly. The bank reported a 32% increase in profit to $3.2 billion, or $1.88 per share, significantly outpacing the $1.58 estimate from LSEG. Revenue for the quarter also jumped 16% to $15.38 billion, exceeding analysts’ predictions of $14.41 billion.
Strong Performance Across Divisions
Morgan Stanley’s impressive results were driven by robust performance in its wealth management, trading, and investment banking segments. The bank benefited from favorable market conditions, a resurgence in investment banking after a challenging 2023, and increased trading activity. The recent shift in the Federal Reserve’s monetary policy, including rate cuts, provided additional support, encouraging more financing and merger activities—key revenue drivers for Wall Street firms.
“The firm reported a strong third quarter in a constructive environment across our global footprint,” said Morgan Stanley CEO Ted Pick in the earnings release.
Following the report, shares of Morgan Stanley rose by 7.5% in early trading, reflecting investor confidence in the bank’s ability to leverage market conditions for growth.
Wealth Management and Trading Drive Results
Morgan Stanley’s wealth management division was a major contributor to the bank’s success this quarter, with revenue rising 14% year-over-year to $7.27 billion, surpassing the StreetAccount estimate by nearly $400 million. This growth underscores the strength of Morgan Stanley’s wealth management franchise, which has become a critical driver of its earnings stability.
The bank’s equity trading operations also outperformed, with revenue climbing 21% to $3.05 billion, above the estimated $2.77 billion. Fixed-income trading revenue saw a more modest increase of 3% to $2 billion, exceeding the forecasted $1.85 billion.
Investment Banking Sees a Major Rebound
Investment banking revenue was another standout in Morgan Stanley’s earnings report, surging 56% from the same period a year ago to reach $1.46 billion, surpassing the $1.36 billion estimate. The rebound in this segment comes after a tough 2023, as the easing of interest rates has revitalized financing and merger activities, allowing the bank to capitalize on new opportunities.
While smaller, Morgan Stanley’s investment management division also delivered solid results, with revenue rising 9% to $1.46 billion, slightly above the estimated $1.42 billion.
Wall Street Rivals Also Post Strong Results
Morgan Stanley’s performance reflects broader positive trends among its Wall Street peers. JPMorgan Chase, Goldman Sachs, and Citigroup also posted better-than-expected results in the third quarter, driven by strong revenue from trading and investment banking activities. This collective strength suggests that major financial institutions benefit from a more favorable market environment as the Federal Reserve’s shift in monetary policy supports increased economic activity.
