Morgan Stanley Shares Surge as Dealmaking Fuels Record Revenue Growth

Morgan Stanley’s profits soared, driven by strong deal activity and stock sales, marking a record revenue year for the firm.

Morgan Stanley Shares Surge as Dealmaking Fuels Record Revenue Growth
Morgan Stanley Shares Surge as Dealmaking Fuels Record Revenue Growth

New York: Morgan Stanley’s profit more than doubled in the last quarter, thanks to a surge in dealmaking and stock sales. This pushed their revenue to a record high for the year.

It’s been a solid quarter for Wall Street banks overall, with a boost from a wave of mergers and acquisitions. The strong U.S. economy, interest rate cuts, and expectations of lighter regulations under President Trump played a big role.

CEO Ted Pick, who took the reins last year, said 2024 was one of the best years in the firm’s history, with net revenue hitting $61.8 billion. He’s feeling optimistic about 2025 too, noting that M&A activity is picking up.

Pick mentioned that the values in the M&A pipelines are the highest they’ve been in seven years, which is super encouraging. He’s also excited about the potential for more stock sales, including IPOs.

The bank’s investment banking revenue jumped 25% to $1.64 billion, driven by fees from stock sales, mirroring strong results from competitors like Goldman Sachs and JPMorgan Chase.

Globally, investment banking revenue rose 26% to $86.80 billion in 2024. Wall Street is buzzing with expectations of more big deals under the Trump administration compared to Biden’s time.

Profit soared to $3.7 billion, or $2.22 per share, for the last three months of the year, up from $1.5 billion, or 85 cents per share, a year earlier. Analysts had expected around $1.7 per share.

After the earnings report, Morgan Stanley shares climbed nearly 3%. Last year, they were among the top performers in large-cap banking, gaining almost 50%.

Activity was bustling across regions, especially in Asia and the Americas, boosting equity trading revenue by 22% to a record level.

Moody’s rated the results as credit positive, highlighting strong trading revenue and asset flows. They noted that capital ratios improved significantly, giving the bank a solid capital buffer.

CFRA Research even raised the 12-month target price for Morgan Stanley shares by $3 to $148, citing favorable trends in capital markets and investment banking.

In wealth management, revenue rose 13% to $7.5 billion, benefiting from record asset management revenue. This segment provides stable income, balancing out the ups and downs of investment banking.

The bank aims to manage $10 trillion in client assets and reached $7.9 trillion this quarter. Most new assets came from financial adviser relationships, and the CFO expects new IPOs to bring in even more assets.

Overall, revenue climbed 26% to $16.2 billion in the fourth quarter, surpassing expectations of $15 billion.

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