Morgan Stanley posts record Q2; revenue and EPS rise

Morgan Stanley reported record second-quarter results, with net revenue of $21.4 billion, up 27% year over year, and earnings per share of $3.46, a 58% increase.

Institutional Securities generated $11 billion in revenue. Equity trading rose 69% year over year to $6.3 billion. Equity underwriting produced $851 million, advisory fees were $798 million, and fixed-income underwriting contributed $788 million.

Wealth Management added $148.1 billion in net new assets for the quarter and produced $8.9 billion in divisional revenue, a 14% increase. The firm reported a return on tangible common equity of 26.6% and an efficiency ratio of 65%.

Management raised the quarterly dividend 15% to $1.15 per share and reauthorized a $20 billion multi-year share buyback program.

Shares rose after the report and are up nearly 50% year to date including the latest gains. The stock trades at more than 18 times forward earnings and carries a consensus rating of Moderate Buy.

In the earnings release, Morgan Stanley chairman and CEO Ted Pick wrote, “Active markets and consistent execution across all three regions drove exceptional results for our Integrated Firm.”

With equity issuance and dealmaking activity recovering, the institutional platform captured higher underwriting and advisory fees while the wealth business continued to expand client assets and fee revenue.