Morgan Stanley capped off a stellar year with a fourth-quarter profit that more than doubled, driven by a surge in mergers and acquisitions (M&A) activity and robust stock sales. These results underscore the bank’s strong performance under CEO Ted Pick and reflect a broader trend of success across Wall Street.
The bank’s impressive earnings were fueled by a thriving U.S. economy, interest rate cuts, and anticipation of relaxed regulations under the then-incoming President Donald Trump. This environment fostered a wave of dealmaking, significantly boosting Morgan Stanley’s investment banking revenue.
CEO Ted Pick hailed 2024 as “one of the strongest years in the firm’s history,” with record net revenue reaching $61.8 billion. He expressed optimism for 2025, citing the highest M&A pipeline values in seven years and a positive outlook for stock sales, including initial public offerings (IPOs). Pick acknowledged that future performance would depend partly on the new administration’s policies and global economic conditions.
Morgan Stanley headquarters in New York City.
Investment banking revenue for the quarter surged 25% to $1.64 billion, primarily due to increased fees from stock sales. This performance mirrored strong results reported by competitors Goldman Sachs and JPMorgan Chase. Global investment banking revenue saw a 26% jump to $86.80 billion in 2024, according to Dealogic data. Industry leaders anticipated a more favorable regulatory landscape for large deals under the Trump administration.
For the three months ending December 31, Morgan Stanley’s profit more than doubled year-over-year, reaching $3.7 billion or $2.22 per share, compared to $1.5 billion or $85 cents per share in the same period the previous year. This significantly exceeded analysts’ average estimate of $1.7 per share, compiled by LSEG. Following the earnings announcement, Morgan Stanley’s shares rose 2.2% in morning trading, building on a nearly 50% gain the previous year.
/cloudfront-us-east-2.images.arcpublishing.com/reuters/375VOT643RLK5K6F2K3XVPK53Q.jpg)
Representational image of stock market activity.
The bank’s equity trading revenue also reached a record high, increasing 22% due to heightened activity across various regions, particularly Asia and the Americas. Moody’s lauded these results as credit positive, highlighting the surge in trading revenue, strong asset flows, and a significant increase in capital ratios. Mike Tayano, a senior analyst at Moody’s, noted that Morgan Stanley’s capital buffer exceeded its regulatory requirement by 240 basis points.
CFRA Research analyst Kenneth Leon subsequently raised the 12-month target price for Morgan Stanley’s shares to $148, citing the bank’s advantageous position within favorable secular trends in capital markets, wealth management, and investment banking.
Morgan Stanley’s wealth management division also delivered strong results, with revenue climbing 13% to $7.5 billion, bolstered by record asset management revenue. This segment provides a stable income stream, counterbalancing the volatility inherent in investment banking and trading activities. The bank aims to manage $10 trillion in client assets and reached $7.9 trillion during the quarter. CFO Sharon Yeshaya attributed most of the net new assets to financial advisor relationships and anticipated that new IPOs in the coming year would further attract assets to the bank’s workplace division. Overall, Morgan Stanley’s fourth-quarter revenue reached $16.2 billion, surpassing the $15 billion consensus estimate according to LSEG data.
