Shares of Morgan Stanley (MS) are rallying in today’s trading after the investment bank reported robust Q3 results. The bank’s earnings surged by 36.2% to $1.88 per share, beating Street estimates of $1.59 per share.
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Investment Banking Boosts Morgan Stanley’s Q3 Revenues
Furthermore, Morgan Stanley’s revenues increased by 15.9% year-over-year to $15.4 billion, surpassing analysts’ expectations of $14.4 billion. This rise in revenues was driven by its investment banking business, which saw its revenues surge by 56% year-over-year in the third quarter to $1.46 billion as there has been an uptick in corporate debt issuance, IPOs, and mergers. Investment banking revenues comprised more than 9% of the bank’s total revenues in the third quarter.
Meanwhile, Morgan Stanley’s wealth management business, a key focus for the bank, reported revenue of $7.27 billion, up by 13.5% year-over-year. Morgan Stanley’s foray into the wealth management segment began when its former CEO, James Gorman, ventured into this business to create a more stable revenue stream compared to the often volatile trading and investment banking businesses.
Is MS a Good Buy Now?
Analysts remain cautiously optimistic about MS stock, with a Moderate Buy consensus rating based on eight Buys, 10 Holds, and one Sell. Over the past year, MS has increased by more than 40%, and the average MS price target of $111.50 implies a downside potential of 0.64% from current levels. These analyst ratings are likely to change following Morgan Stanley’s results today.
