Morgan Stanley's (MS) earnings beat in Q2 2024 can be attributed to several key factors:
- Investment Banking Performance: Morgan Stanley's investment banking business had a significant impact on its earnings. The company's investment banking revenue increased, which contributed to the overall earnings beat. This was evident in both the first and third quarters of 2024, where the company surpassed earnings estimates due to strong investment banking revenues12.
- Wealth Management Segment: The wealth management segment of Morgan Stanley also played a role in the earnings beat. The company reported net new assets of $95 billion and showcased net revenues of $6.9 billion in this segment. Additionally, the investment management segment showed net revenues of $1.4 billion with assets under management (AUM) reaching $1.5 trillion43.
- Trading Revenues: Increased underwriting revenues and equity trading revenues were responsible for the uplift in net revenues. Despite projecting revenues of $6.33 billion, Morgan Stanley reported revenues of $7.02 billion, reflecting a 3% year-over-year increase13.
- Analyst Expectations: Analysts at Zacks Research had lifted their Q2 2024 earnings per share (EPS) estimates for Morgan Stanley, anticipating a robust performance. However, even after the initial lift, the company's actual EPS exceeded expectations, indicating a strong operational performance56.
In conclusion, Morgan Stanley's Q2 2024 earnings beat was driven by strong performance across its investment banking, wealth management, and trading segments, coupled with favorable analyst expectations.