Morgan Stanley Beats Q2 Estimates Amid Investment Banking Weakness

Morgan Stanley delivered a mixed Q2 performance, with earnings surpassing expectations while investment banking revenues disappointed. The firm reported $2.13 per share earnings, beating the $1.93 consensus estimate, as net income ROSE 15% to $3.39 billion. Strong trading and wealth management results drove growth, with assets under management climbing to $8.2 trillion.

Investment banking fees declined 5% year-over-year to $1.54 billion, dragged down by lower advisory fees and weak non-investment grade underwriting. While equity underwriting surged 42%, it failed to offset broader segment weakness. Institutional securities generated $7.64 billion in net revenues, up 9% annually, with pre-tax income reaching $2.11 billion.

The market reacted negatively to the banking segment's underperformance, sending shares down 1.27% to $139.79. After-hours trading saw further declines to $139.40 as investors weighed the divergent performance across business lines.