Earnings remain solid in Q2 2025, as Morgan Stanley benefits from strength in Wealth and Equities

Overview

Morgan Stanley reported strong second quarter results for 2025, driven by robust performance across Wealth Management and Institutional Securities. Net revenues exceeded expectations, while profitability remained high despite a more volatile market backdrop. Equities trading continued to benefit from increased client activity, and Wealth Management sustained strong asset inflows. The firm also announced an increase in its quarterly dividend and continued buybacks, reinforcing its commitment to long-term shareholder returns.

CEO Ted Pick said: “Morgan Stanley delivered another strong quarter. Six sequential quarters of consistent earnings – $2.02, $1.82, $1.88, $2.22, $2.60 and $2.13 – reflect higher levels of performance in different market environments. Institutional Securities saw strength and balance across businesses and geographies. Wealth continues to deliver, adding $59 billion of net new assets and $43 billion of fee-based flows. Total client assets across Wealth and Investment Management reached $8.2 trillion. We announced an increase of our quarterly common stock dividend to $1.00 per share with flexibility to deploy incremental capital. The management team is executing across the Integrated Firm, acting as a trusted advisor to clients and driving durable growth and long-term returns for our shareholders.”

Q2 2025 vs. Q2 2024:

Net income grew to $3.5bn (+15% YoY), with diluted EPS of $2.13 (compared to $1.82 in Q2 2024).
Net revenues rose to $16.8bn (+12% YoY), supported by strength in trading, wealth, and asset management.
- Institutional Securities revenues reached $7.6bn (+9% YoY), led by Equities (+23%) and Fixed Income (+9%).
- Investment Banking revenue decreased to $1.54bn (-5% YoY), reflecting lower advisory and fixed income underwriting activity.
- Wealth Management revenues climbed to $7.8bn (+14% YoY), driven by record asset levels, transactional volumes, and client activity.
- Investment Management revenues reached $1.6bn (+12% YoY), reflecting strong long-term net flows and performance-related income.
Net new assets totaled $59bn, with fee-based flows of $43bn.
Pre-tax income was $4.6bn (+13% YoY), with a pre-tax margin of 28% (vs. 27% in Q2 2024).
Expense efficiency ratio improved slightly to 71% (from 72% in Q2 2024).
Return on equity (ROE) was 13.9%, and return on tangible common equity (ROTCE) rose to 18.2% (vs. 17.5% in Q2 2024).
Book value per share increased to $61.59 (+8% YoY), and tangible book value per share reached $47.25 (+12% YoY).
The firm repurchased $1.0bn of common stock and increased its quarterly dividend to $1.00 per share (+7.5 cents).
CET1 capital ratios stood at 15.0% (Standardized) and 15.7% (Advanced), reflecting robust capitalization and risk discipline.

While macroeconomic headwinds remain, including trade uncertainty and market volatility, Morgan Stanley continues to demonstrate durable earnings power through its diversified business model and global client base. Strong inflows, stable margins, and disciplined expense control keep the firm on track to deliver long-term value to stakeholders.

Morgan Stanley experienced a modest decline of around 2% in the five trading sessions following its Q2 2025 earnings release. Despite the initial downward pressure, the stock has shown signs of stabilization and remains above key technical levels, including the 50-day SMA and the 200-day SMA. The RSI has cooled to 59.56, retreating from overbought levels reached earlier in July, which may reflect a consolidation phase after a strong prior uptrend. While momentum has softened, the overall structure remains bullish, and the recovery from the post-earnings low near $136 suggests that buyers are stepping back in. As long as MS holds above the $138-$140 range, the technical outlook remains constructive, with potential for a renewed push toward recent highs around $143-$144.