Morgan Stanley released second-quarter earnings and earnings that beat analysts’ forecasts in large part due to growth in the equity trading and investment banking segments. The bank doubled its dividend and announced a $ 12 billion buyback of its shares.
Morgan Stanley (MS) is the last of the six largest US banks to report second-quarter financial results today before trading on the NYSE.
JPMorgan Chase (JPM), Bank of America (BAC), Wells Fargo (WFC) and Citigroup (C) have surpassed analysts’ profit forecasts largely due to the use of released billions of dollars in turnover, previously set aside to cover loan losses.
Morgan Stanley’s key competitor, Goldman Sachs (GS), beat forecasts thanks to strong growth in consulting revenues (mergers, acquisitions, IPOs, etc.).
Morgan Stanley shares, up 83% year-on-year and 34.9% year-to-date, are down slightly (1.6%) since their financials were published (at the time of writing). For comparison, the large industry index KBW Nasdaq Bank is up 27.34% YTD, and the S&P 500 is up 16.46%.
Morgan Stanley Q2 vs Wall Street Analyst Average:
Earnings per share were $ 1.85, above analysts’ estimates of $ 1.65.
Total quarterly revenues rose 17% to $ 14.8 billion, which is also above the $ 13.98 billion estimate. Morgan Stanley’s quarterly earnings and earnings statistics for the last 2 years are available here.
Morgan Stanley benefited from a record-breaking surge in mergers / acquisitions (M&A) and IPOs in the first half of the year.
More than 28,000 deals were announced between January and June 2021 between companies totaling more than $ 2.82 trillion, according to Refinitiv data.
Morgan Stanley advised 216 deals in the first six months of the year and ranked third in the global M&A chart for the quarter, behind Goldman Sachs and JPMorgan.
Morgan Stanley’s earnings were further boosted by stock underwriting fees from numerous high-profile IPOs, including Didi Global Inc (DIDI), the largest U.S. listing in a year.
James P. Gorman, chairman and chief executive officer of Morgan Stanley, noted that the bank’s wealth and investment divisions have attracted record $ 120 billion in cash flows, and institutional securities generated more than $ 7 billion in revenue.
Thanks to strong, stable earnings, Morgan Stanley announced a doubling of its dividend dividend and announced a new $ 12 billion share buyback program, returning excess capital to shareholders.