Morgan Stanley's fourth-quarter profit more than doubled on the back of a wave of deal deals and stock sales, and revenue hit a new full-year record.
The results capped a strong quarter for Wall Street banks, which benefited from a surge in mergers and acquisitions due to a strong U.S. economy, lower interest rates and hopes of loosening regulations from President-elect Donald Trump.
It was also a strong first year for CEO Ted Pick, who won the three-man race for the top spot. Pick said 2024 was “one of the strongest years in the company's history” as Morgan Stanley generated record net revenue of $61.8 billion.
Pick told analysts on a conference call Thursday that the outlook for 2025 is positive. “The value of the M&A pipeline is at its highest in seven years, which is really encouraging. Part of this will depend on how things play out in the first few months of the next administration, and how we “It depends on how things feel beyond that, but the pent-up activity that we're seeing is starting to be released,” he said.
The CEO also said he was “bullish” on the possibility of a stock sale, including an initial public offering.
The bank's quarterly investment banking revenue rose 25% to $1.64 billion, led by stock sales fees, similar to results reported by rivals Goldman Sachs and JPMorgan Chase & Co. on Wednesday.
Global investment banking revenues rose 26% to $86.8 billion in 2024, according to data from Dealogic. Wall Street CEOs and dealmakers expect more big deals to be approved under the Trump administration than under his predecessor, Joe Biden.
Earnings for the three months ended Dec. 31 were $3.7 billion, or $2.22 per share, more than double the $1.5 billion, or 85 cents per share, a year earlier. Analysts on average expected earnings of $1.7 per share, according to estimates compiled by LSEG.
Morgan Stanley shares rose nearly 3%. Last year, the company was the top performer in the large banks sector, rising nearly 50%.
Equity trading revenue increased 22% to a record high, driven by strong activity across regions, particularly in Asia and the Americas.
Ratings agency Moody's said the results were credit positive and reflected accelerating trading revenues and solid asset flows.
Mike Tayano, Moody's senior analyst, said capital ratios were up significantly compared to the previous quarter. “The buffer has further expanded to 240 basis points above regulatory requirements.”
Following the earnings release, CFRA Research's Kenneth Leung raised his 12-month price target on Morgan Stanley stock by $3 to $148. “We believe Morgan Stanley is benefiting from long-term positive trends in capital markets, asset management and investment banking,” he said in a research note.
asset management
Revenue at Morgan Stanley's wealth management division rose 13% to $7.5 billion, supported by record profits.
This division provides banks with stable income, offsetting fluctuations from investment banking and trading.
The bank has set a goal of managing $10 trillion in client assets, which reached $7.9 trillion in the quarter.
Chief Financial Officer Sharon Yeshaya said most of the net new assets came from relationships with financial advisors. Morgan Stanley's CFO expects another IPO this year, bringing new wealth to the bank's workplace division, which manages employee relationships.
Fourth-quarter sales rose 26% to $16.2 billion, beating expectations by $15 billion, according to LSEG data.
