Morgan Stanley

Morgan Stanley delivered a positive result and managed an all-around beat in the last quarter. The company generated $13.5 billion in revenue. Green shoots emerged throughout their businesses in Institutional Securities, and client engagement gradually increased. In Wealth Management, Morgan Stanley saw a decrease in sweep outflows and a stabilizing of retail assets in cash and cash equivalents. Expenses for the quarter included $99 million in costs linked with the integrations of E*TRADE and Eaton Vance. Revenues from institutional securities fell in the quarter. Although total client activity was lower than it had been in the previous quarter, performance improved as the quarter went on due to stronger market conditions. Revenues from investment banking remained constant from the previous year. Prime Brokerage revenues were strong, bolstered by rising average customer balances in line with rising market levels. In the quarter, they enhanced their provision for credit losses on ISG loans and lending commitments. The increase was fueled by a minor increase in the portfolio’s size and a persistently bleak prognosis for commercial real estate. The company also made good progress with its Eaton Vance integration. Their private equity platform, Morgan Stanley Capital Partners, also acquired RowCal. We give Morgan Stanley a ‘Hold’ rating with a revised target price.