Morgan Stanley Q2 EPS beats estimates, sales rise 27%
Morgan Stanley reported Q2 FY26 earnings of $3.46 per share, surpassing estimates, with revenue rising 27% to $21.35 billion. Record performance in Institutional Securities and Wealth Management drove the results, alongside a $20 billion share repurchase authorization.
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Morgan Stanley reported second-quarter 2026 earnings of $3.46 per share, beating the analyst consensus estimate of $2.91 by 18.9%. This represents a 62.44% increase over earnings of $2.13 per share from the same period last year. The company reported quarterly sales of $21.35 billion, which beat the analyst consensus estimate of $19.64 billion by 8.71%. This is a 27% increase over sales of $16.79 billion from the same period last year. Net income increased to $5.58 billion from $3.54 billion a year earlier.
Institutional Securities Delivers Record Quarter
Institutional Securities reported record net revenue of $11.04 billion, up 44% from a year earlier. Investment banking revenue increased 58% to $2.44 billion, reflecting stronger advisory activity, equity underwriting and fixed-income underwriting. Equity trading revenue climbed 69% to a record $6.30 billion, supported by strong client engagement across businesses and regions. Fixed-income revenue rose 13% to $2.46 billion.
Wealth Management Reaches Milestone
Wealth Management revenue increased 14% to a record $8.86 billion, driven by higher asset management fees and stronger client activity. The business attracted a record $148.1 billion in net new assets during the quarter, lifting total client assets to $8.08 trillion. Combined client assets across Wealth Management and Investment Management reached the $10 trillion milestone. Investment Management revenue rose 6% to $1.65 billion.
Capital Allocation and Outlook
The board reauthorized a multi-year share repurchase program of up to $20 billion beginning in the third quarter and increased the quarterly dividend by 15 cents to $1.15 per share. During the quarter, Morgan Stanley repurchased $1.5 billion of common stock. Chairman and CEO Ted Pick estimated the artificial intelligence infrastructure investment cycle is only "10%-15% of the way through," suggesting significant room for growth.
| Segment | Q2 Revenue | YoY Change |
|---|---|---|
| Institutional Securities | $11.04 billion | +44% |
| Wealth Management | $8.86 billion | +14% |
| Investment Management | $1.65 billion | +6% |
| Total Revenue | $21.35 billion | +27% |
How sustainable is the current surge in investment banking and equity trading revenue given the volatile macroeconomic environment?
What specific strategies will Morgan Stanley deploy to maintain the record pace of net new assets in Wealth Management as interest rates potentially fluctuate?
With the AI infrastructure investment cycle estimated to be only 10%-15% complete, how does the firm plan to leverage this trend across its different business segments?
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