Morgan Stanley (MS) Q2 2026: Record Revenues and EPS — Strongly Positive

Morgan Stanley (NYSE: MS) reported a remarkable second quarter for 2026, showcasing significant growth compared to the previous year. The firm achieved net revenues of $21.3 billion, marking an increase of $4.5 billion or +26.8% year-over-year from $16.8 billion in Q2 2025. Additionally, earnings per diluted share (EPS) surged to $3.46, up $1.33 or +62.4% from $2.13 in the same quarter last year.

This quarter's performance is undoubtedly a positive outcome for shareholders, driven by robust results across all business segments, particularly in Institutional Securities and Wealth Management. The substantial increase in revenues and EPS reflects Morgan Stanley's effective execution and strong market conditions, which have translated into higher client engagement and asset inflows.

Key Financial Metrics

• Net Revenues: $21,348 million (Q2 2026) vs. $16,792 million (Q2 2025)
• Net Income: $5,581 million (Q2 2026) vs. $3,539 million (Q2 2025)
• EPS: $3.46 (Q2 2026) vs. $2.13 (Q2 2025)
• Return on Tangible Common Equity (ROTCE): 26.6% (Q2 2026) vs. 18.2% (Q2 2025)
• Expense Efficiency Ratio: 65% (Q2 2026) vs. 71% (Q2 2025)

Business Segment Highlights

• Institutional Securities:
  • Net revenues of $11.0 billion, up $3.4 billion or +44.5% from $7.6 billion in Q2 2025.
  • Pre-tax income increased to $4.3 billion from $2.1 billion year-over-year.
  • Notable growth in Equity revenues, which rose 69% to $6.3 billion.
• Wealth Management:
  • Net revenues reached $8.9 billion, a 14.0% increase from $7.8 billion in Q2 2025.
  • The segment added $148 billion in net new assets, significantly up from $59.2 billion a year ago.
  • Pre-tax margin stood at 30.5%.
• Investment Management:
  • Reported net revenues of $1.6 billion, up 6% from $1.6 billion in Q2 2025.
  • Pre-tax income increased to $404 million from $323 million year-over-year.

Shareholder Returns and Guidance

Morgan Stanley's commitment to returning capital to shareholders is evident as the firm repurchased $1.5 billion of its common stock during the quarter. Additionally, the Board of Directors declared a $1.15 quarterly dividend per share, an increase of 15 cents, payable on August 14, 2026. The firm also reauthorized a multi-year common equity share repurchase program of up to $20 billion, which is expected to enhance shareholder value further.

Forward-Looking Catalysts

Investors should keep an eye on the upcoming quarters for continued momentum in both Institutional Securities and Wealth Management. The firm’s ability to maintain high levels of client engagement and capitalize on favorable market conditions will be crucial. Furthermore, the impact of the newly authorized share repurchase program and the effectiveness of capital allocation strategies will be key areas to watch as Morgan Stanley aims to sustain its growth trajectory.

In summary, Morgan Stanley's Q2 2026 results reflect a strong operational performance and a solid foundation for future growth, making it a favorable outlook for shareholders.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Amounts in millions)

Note: All amounts are in thousands/millions.

Description	2Q 2026	2Q 2025
Net revenues	$21,348	$16,792
Provision for credit losses	$98	$196
Compensation expense	$8,187	$7,190
Non-compensation expenses	$5,715	$4,784
Pre-tax income	$7,348	$4,622
Net income app. to MS	$5,581	$3,539
Expense efficiency ratio	65 %	71 %
Earnings per diluted share	$3.46	$2.13
Book value per share	$67.80	$61.59
Tangible book value per share	$53.18	$47.25
Return on equity	20.7 %	13.9 %
Return on tangible common equity	26.6 %	18.2 %

CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in millions)

Note: All amounts are in thousands/millions.

Description	2Q 2026	2Q 2025
Common Stock Repurchases
Repurchases ($MM)	$1,500	$1,000
Number of Shares (MM)	8	8
Average Price	$197.64	$123.22
Period End Shares (MM)	1,572	1,598
Effective Tax Rate	23.1%	22.7%
Capital
Standardized Approach
CET1 capital	14.8%	15.0%
Tier 1 capital	16.5%	16.9%
Advanced Approach
CET1 capital	16.2%	15.7%
Tier 1 capital	17.9%	17.6%
Leverage-based capital
Tier 1 leverage	6.0%	6.8%
SLR	4.9%	5.5%

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