Firm‑wide ROE and ROTCE
The Firm achieved an ROE of 20.7% and ROTCE of 26.6%, indicating strong underlying profitability relative to equity and tangible equity.
Source: 10-Q Item 2 MD&A
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's fiscal second quarter 2026 delivered pre‑tax income of $7.3 billion and an ROE of 20.7%, reflecting broad strength across institutional securities and wealth management. Institutional Securities benefited from robust equity trading and higher investment banking fees, while Wealth Management saw growth in asset management revenues and net interest income. The firm maintained a 65% efficiency ratio, signaling ongoing expense discipline. These results were achieved against a backdrop of negative year‑to‑date operating cash flow and elevated leverage, which merit monitoring.
EPS (Diluted)
$3.46
+62.44% YoY
Source: SEC XBRL
MS's fiscal Q2 FY2026 corresponds to calendar Q2 2026.
Last 4 quarters: 4 beats
| Quarter | Actual EPS (USD) | Consensus (USD) | Result |
|---|---|---|---|
| Jun 2026This filing | 3.46 | 3.03 | Beat +14.1% |
| Mar 2026 | 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 $3.46 versus the $3.03 analyst consensus — a +14.1% beat for Jun 2026.
3 reported segments · SEC XBRL
Segment revenue totals $21.54B; with -$194M of reconciling items (corporate, unallocated and eliminations) it ties to the $21.35B of consolidated revenue on the income statement.
Profit above is reported as net income, the measure MS itself discloses in this filing. Each company chooses its own measure here, so these margins are not comparable with another company's.
Compiled by AI from 10-Q Item 2 of this filing
The Firm achieved an ROE of 20.7% and ROTCE of 26.6%, indicating strong underlying profitability relative to equity and tangible equity.
Source: 10-Q Item 2 MD&A
Wealth Management gathered $148 billion in net new assets and $39 billion in fee‑based assets, underscoring robust client engagement and product‑mix shift.
Source: 10-Q Item 2 MD&A
The Standardized Common Equity Tier 1 capital ratio stood at 14.9%, well above regulatory requirements, supporting strategic flexibility.
Source: 10-Q Item 2 MD&A
The expense efficiency ratio remained 65% for both the quarter and year‑to‑date, demonstrating operating leverage while continuing to invest in the business.
Source: 10-Q Item 2 MD&A
Institutional Securities net revenues were primarily driven by strong results in equity markets and higher investment banking revenues, though specific product detail was not disclosed.
Source: 10-Q Item 2 MD&A
Compiled by AI from this SEC filing · 1 high, 4 medium, 0 low
The debt‑to‑equity ratio of 13.39x and total liabilities of $1.56 trillion indicate significant financial leverage, which may amplify losses in adverse market conditions and constrain financial flexibility.
Source: 10-Q Balance Sheet (XBRL)
Year‑to‑date operating cash flow was negative $9.8 billion, driven by net outflows from trading assets and lending, raising concerns about cash self‑sufficiency and reliance on external financing.
Source: 10-Q Cash Flow Statement (XBRL)
A substantial portion of revenue came from equity trading, which is inherently volatile and sensitive to market liquidty, client activity, and regulatory changes.
Source: 10-Q Income Statement (XBRL) and MD&A
Long‑term debt increased 19.7% year‑over‑year to $383 billion, which may increase interest expense and refinancing risk if rates remain elevated.
Source: 10-Q Balance Sheet (XBRL)
Wealth Management's revenue growth depends heavily on asset management fees and net interest income, both sensitive to market valuations and rate changes; a downturn could compress margins.
Source: 10-Q Item 2 MD&A
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Net Income $B | 5.58 $B | 3.54 $B | +57.70% |
EPS (Basic) $ | 3.50 $ | 2.15 $ | +62.79% |
EPS (Diluted) $ | 3.46 $ | 2.13 $ | +62.44% |
Answers draw on this SEC filing and the data on this page
Expected release date, analyst estimates & what to watch
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.
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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