Strong Earnings Growth
Net income rose 29.0% YoY to $5.57B in Q1 FY2026, while diluted EPS climbed 31.9% to $3.43, reflecting robust profitability improvement across the firm's business segments.
Source: 10-Q Income Statement
Computed from published fixed rules, not a model's judgement — though one input, the count of high-severity risks, comes from the AI analysis below.
Not investment advice and not a price target: it scores the quarter's fundamentals, not the stock. Full methodology →
AI Takeaway
Morgan Stanley delivered a strong Q1 FY2026, with net income surging 29.0% year-over-year to $5.57B and diluted EPS rising 31.9% to $3.43, driven by significant balance sheet expansion and improved cash flow generation.
EPS (Diluted)
$3.43
+31.92% YoY
Source: SEC XBRL
Morgan Stanley (MS) used $7.1B of cash in operations in Q1 FY2026. MS's fiscal Q1 FY2026 corresponds to calendar Q1 2026.
Last 4 quarters: 4 beats
| Quarter | Actual EPS (USD) | Consensus (USD) | Result |
|---|---|---|---|
| Jun 2026 | 3.46 | 3.03 | Beat +14.1% |
| Mar 2026This filing | 3.43 | 3.09 | Beat +10.9% |
| Dec 2025 | 2.68 | 2.51 | Beat +6.8% |
| Sep 2025 | 2.80 | 2.17 | Beat +29.3% |
Reported EPS of $3.43 versus the $3.09 analyst consensus — a +10.9% beat for Mar 2026.
Compiled by AI from this SEC filing
Net income rose 29.0% YoY to $5.57B in Q1 FY2026, while diluted EPS climbed 31.9% to $3.43, reflecting robust profitability improvement across the firm's business segments.
Source: 10-Q Income Statement
Total assets grew 21.6% YoY to $1.58T, with cash and equivalents surging 47.2% to $133.5B, indicating substantial growth in the firm's asset base and liquidity position.
Source: 10-Q Balance Sheet
Long-term debt increased 22.2% YoY to $363.0B, contributing to a debt-to-equity ratio of approximately 12.8x, which is characteristic of large investment banks but warrants monitoring.
Source: 10-Q Balance Sheet
Operating cash flow improved significantly to -$7.1B from -$24.0B in the prior year period, a 70.4% improvement YoY, reflecting better working capital management despite remaining negative — typical for broker-dealer operations.
Source: 10-Q Cash Flow Statement
Financing cash flows surged 179.5% YoY to $36.5B, suggesting significant debt issuance or other capital-raising activities that contributed to the firm's liquidity build-up during the quarter.
Source: 10-Q Cash Flow Statement
Compiled by AI from this SEC filing · 2 high, 3 medium, 0 low
Morgan Stanley's debt-to-equity ratio stands at approximately 12.8x, reflecting the inherently leveraged nature of investment banking. While common in the industry, this level of leverage amplifies losses during market downturns and could strain capital ratios under stress scenarios.
Source: 10-Q Balance Sheet
Operating cash flow remained negative at -$7.1B in Q1 FY2026, though significantly improved from -$24.0B in the prior year. Persistent negative operating cash flows in certain quarters are common for broker-dealers due to trading inventory fluctuations, but sustained negativity could signal liquidity pressure.
Source: 10-Q Cash Flow Statement
Total assets expanded 21.6% YoY to $1.58T, a pace that raises questions about asset quality and risk concentration. Rapid balance sheet growth in a volatile market environment could expose the firm to unexpected credit or market losses.
Source: 10-Q Balance Sheet
Long-term debt grew 22.2% YoY to $363.0B, increasing the firm's debt servicing obligations. In a rising or volatile interest rate environment, higher funding costs could compress net interest margins and profitability.
Source: 10-Q Balance Sheet
Stockholders' equity grew only 7.0% YoY to $114.3B, significantly lagging the 21.6% growth in total assets and 22.9% growth in total liabilities. This divergence indicates increasing leverage and a thinner equity cushion relative to the firm's overall risk exposure.
Source: 10-Q Balance Sheet
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Net Income $B | 5.57 $B | 4.32 $B | +29.02% |
EPS (Basic) $ | 3.47 $ | 2.62 $ | +32.44% |
EPS (Diluted) $ | 3.43 $ | 2.60 $ | +31.92% |
Answers draw on this SEC filing and the data on this page
Morgan Stanley posted strong Q2 FY2026 results with pre-tax income of $7.3 billion and a 20.7% ROE, driven by robust equity trading and wealth management growth.
Morgan Stanley delivered a strong FY2025 with net income surging 25.9% to $16.86B and diluted EPS rising 28.4% to $10.21, driven by robust business performance, though operating cash flow turned sharply negative at -$17.89B reflecting significant balance sheet activity.
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