Morgan Stanley Shares Slide Despite Strong Q3

Morgan Stanley (NYSE: MS) beat third-quarter profit and revenue forecasts before the US open today, but its shares fell anyway. The US investment bank and wealth manager earned $3.03 a share on revenue of $20.34bn, against LSEG consensus of $2.91 and $19.95bn.

The shares were down 3.01% at $181.02 in a delayed quote from about 4.01pm UK time, against a close of $186.64 yesterday, when they had already fallen 1.8%. That leaves them about 22% below the intraday high of $232.25 reached on the 15th of July.

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Equities trading carried the quarter. Revenue from the business rose 41% to $5.8bn, about $909m above the StreetAccount estimate, with Asia particularly strong. Net income was $4.91bn, up 6.5%, while group revenue rose 12% from about $18.2bn a year earlier. Earnings per share compare with $2.80 in the third quarter of 2025.

Other trading lines were weaker. Fixed income revenue fell 7% to $2.01bn, about $260m below expectations. Investment banking rose 2% to $2.16bn, about $110m short, with advisory up and equity underwriting down.

The wealth division posted record revenue of $9.1bn, up 10%, with $232bn of net new client assets.

Chairman and chief executive Ted Pick framed the quarter this way:

Morgan Stanley reported another strong quarter with net revenues of $20.3 billion, EPS of $3.03 and a ROTCE of 22.6%

Ted Pick, Chairman and CEO, Morgan Stanley

ROTCE is return on tangible common equity, a measure of profit relative to shareholders’ capital. The bank’s common equity tier 1 ratio, a gauge of capital strength, was 14.9%.

Mike Mayo, a Wells Fargo analyst, called the results “good, but not great”.