Morgan Stanley delivered a record Q1 2026, reporting EPS of $3.43 (beating the $3.02 consensus estimate by 13.6%) and record net revenues of $20.6 billion (up 16% YoY, vs. $19.7 billion expected). Shares rose 4.3% in pre-market trading following the announcement, reaching a new 52-week high near $194.59.
About Morgan Stanley
Morgan Stanley (NYSE: MS) is a leading global financial services firm founded in 1935, headquartered in New York City, with offices in 42 countries worldwide. The firm provides investment banking, securities, wealth management, and investment management services to corporations, governments, institutions, and individual investors.
As of Q1 2026, Morgan Stanley carried a market capitalization of approximately $289.9 billion. The firm employed 83,922 people globally as of March 31, 2026, up from 81,023 a year earlier. Its quarterly dividend stands at $1.00 per share (annualized $4.00; yield approximately 2.1%), with a dividend payout ratio of 39.2%. The tangible book value per share reached $51.58 in Q1 2026, reflecting 11.9% year-over-year growth. CEO Ted Pick, who assumed leadership in 2024, has led the firm through a sustained period of record-setting performance across its integrated business model.
Top Financial Highlights
- Total net revenues reached $20.6 billion, a record quarterly level, increasing 16% from $17.7 billion year over year.
- Net income attributable to shareholders was $5.6 billion, rising 29% from $4.3 billion in Q1 2025.
- Diluted EPS stood at $3.43, compared to $2.60, reflecting a 32% increase year over year.
- Pre-tax income reached a record $7.0 billion, supported by strong performance across business segments.
- Return on tangible common equity improved to 27.1%, up from 23.0%, indicating enhanced profitability.
- The expense efficiency ratio improved to 65%, compared to 68% in Q1 2025, despite $178 million in severance charges.
- Institutional securities revenue totaled $10.7 billion, increasing 19%, with investment banking up 36%, equities up 25%, and fixed income up 29%.
- Wealth management revenue reached $8.5 billion, rising 16%, with a pre-tax margin of 30.4%.
- Investment management revenue was $1.5 billion, declining 4% due to lower carried interest from private funds.
- Wealth management net new assets totaled $118 billion, including $54 billion in fee-based flows.
- Total assets under management reached approximately $1.9 trillion, increasing from about $1.6 trillion in Q1 2025.
- The CET1 capital ratio stood at 15.1%, well above the required 11.8%, reflecting a strong capital position.
- Share repurchases totaled $1.75 billion, with 10 million shares bought at an average price of $169.15.
- A quarterly dividend of $1.00 per share has been declared, payable on May 15, 2026.
- Book value per share increased to $66.18, up from $60.41 in Q1 2025.
Beat or Miss?
| Metric | Reported | Estimated | Difference / Analysis |
| EPS (diluted) | $3.43 | $3.02 | +$0.41 (+13.6% beat) |
| Total Net Revenue | $20.58 billion | $19.74 billion | +$840 million (+4.3% beat) |
| Equity Trading Revenue | $5.15 billion | ~$4.70 billion | ~$450 million above StreetAccount estimate |
| Fixed Income Revenue | $3.36 billion | ~$3.2 billion | ~$160 million above estimate |
| Investment Banking Revenue | $2.12 billion | ~$2.10 billion | Closely in line with expectations |
| Investment Management Revenue | $1.54 billion | ~$1.65 billion | ~$110 million miss; lower carried interest cited |
| Efficiency Ratio | 65% | 67.20% | 222 basis point beat — stronger operating leverage |
| Tangible Book Value per Share | $51.58 | $51.45 | In line (11.9% YoY growth) |
What Leadership Is Saying?
CEO Ted Pick on Strategy and Vision:
“Morgan Stanley reported a record quarter. Strong execution resulted in net revenues of $20.6 billion, EPS of $3.43 and a ROTCE of 27.1%. Institutional Securities benefited from robust client engagement and strength globally. Wealth Management demonstrated continued momentum, with net new assets of $118 billion and fee-based asset flows of $54 billion. These results affirm the capabilities of our Integrated Firm as we deliver a higher plane of operating performance.”
CFO Sharon Yeshaya on Financials and Margins:
“The firm produced record revenues of $20.6 billion and record EPS ex-CVA of $3.43. Our ROTCE was very strong at 27.1%. The results this quarter demonstrated the strength of our integrated model and the scale of our global platform. For the quarter, our efficiency ratio was 65%, reflecting strong operating leverage and disciplined execution as we continue to invest strategically across the firm.”
Historical Performance (YoY Comparison)
| Category | Q1 2026 | Q1 2025 | Change (%) |
| Total Net Revenues | $20,580 million | $17,739 million | 16.00% |
| Net Income (applicable to MS) | $5,567 million | $4,315 million | 29.00% |
| EPS (diluted) | $3.43 | $2.60 | 31.90% |
| Pre-tax Income | $7,011 million | $5,544 million | 26.50% |
| Total Non-Interest Expenses | $13,471 million | $12,060 million | 11.70% |
| Compensation Expense | $8,542 million | $7,521 million | 13.60% |
| Non-compensation Expenses | $4,929 million | $4,539 million | 8.60% |
| Institutional Securities Revenue | $10,721 million | $8,983 million | 19.30% |
| Wealth Management Revenue | $8,519 million | $7,327 million | 16.30% |
| Investment Management Revenue | $1,535 million | $1,602 million | -4.20% |
| ROTCE | 27.10% | 23.00% | +410 bps |
| Expense Efficiency Ratio | 65% | 68% | -300 bps |
Competitor YoY Comparison (Q1 2026 vs Q1 2025)
The following table compares Morgan Stanley against key capital markets peers, providing context on relative performance.
| Category | Morgan Stanley Q1 2026 | Morgan Stanley Q1 2025 | Change (%) |
| Total Revenue | $20.58 billion | $17.74 billion | 16.00% |
| Net Income | $5.57 billion | $4.32 billion | 29.00% |
| EPS | $3.43 | $2.60 | 31.90% |
| Competitor | Q1 2026 Revenue (YoY Growth) | Notes |
| Goldman Sachs | +14.4% YoY | Beat analyst estimates by ~1%; Fixed income fell ~$910 million short of StreetAccount estimates |
| Jefferies | +26.6% YoY | Beat analyst estimates by 1.4%; stock rose 1.6% post-earnings |
| Morgan Stanley | +16.0% YoY | Record quarter; outperformed Goldman Sachs in fixed income trading |
Morgan Stanley outperformed Goldman Sachs specifically in the fixed income trading category, where Goldman experienced a shortfall of approximately $910 million relative to StreetAccount estimates. Jefferies led in percentage revenue growth among the three, though it operates at a significantly smaller scale than the bulge bracket peers.
How the Market Reacted?
Morgan Stanley’s stock surged 4.3% in pre-market trading following the earnings release, reaching approximately $187.70, and later hit a new 52-week high of $194.59 during the trading session. Shares were last traded at $191.54, representing a 4.38% gain on the day, with approximately 2.24 million shares changing hands.
The strong market reaction reflected investor confidence in the firm’s trading revenue beat of nearly $1 billion over expectations, its record pre-tax income, and sustained growth in Wealth Management. Following the results, Keefe, Bruyette & Woods raised its price target on MS to $210.00 with a “moderate buy” rating, while the average analyst consensus price target stood at approximately $189.94 with a “Hold” rating.
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