Morgan Stanley profit beats estimates as dealmaking resurgence gains steam

Morgan Stanley (NYSE:MS) posted fourth-quarter earnings that surpassed analyst forecasts on Thursday, as a late-year surge in corporate dealmaking and equity underwriting bolstered the firm’s bottom line.

The New York-based investment bank reported net income of $4.4 billion, or $2.68 per share.

The result significantly outperformed the $2.41 per share average estimate from analysts surveyed by Zacks Investment Research.

Net revenues climbed to $17.89 billion (net of interest expense), beating the $17.32 billion consensus as the bank benefited from a broader recovery in capital markets.

The quarter was defined by a major resurgence in Investment Banking, where revenues jumped 47% year-over-year to $2.41 billion.

Corporate clients, previously sidelined by high interest rates, returned to the markets to fund acquisitions and launch initial public offerings.

Equities trading also remained a bright spot, rising 10% to $3.67 billion, though these gains were tempered by a 9% decline in fixed-income results.

The firm’s Wealth Management division, a key pillar of its stability-focused strategy, saw revenues rise 13% to $8.43 billion.

Total client assets across wealth and investment management reached a staggering $9.3 trillion, supported by over $350 billion in net new assets over the course of the year.

For the full year 2025, Morgan Stanley reported record net revenues of $70.6 billion and a return on tangible equity (ROTCE) of 21.6%.

In a sign of continued confidence, the bank's board declared a quarterly dividend of $1 per share and continues to execute on its multi-year $20 billion share repurchase program.