Morgan Stanley MS reported a first-quarter 2025 EPS of $2.60, up from $2.02 a year ago, beating the consensus of $2.21. Net earnings increased to $4.16 billion from $3.14 billion.
The U.S. bank reported first-quarter revenue of $17.74 billion, up 17% year over year, beating the consensus of $16.57 billion.
Morgan Stanley’s provision for credit losses jumped to $135 million, primarily driven by growth in secured lending facilities and the corporate loan portfolio, as well as the impact of a weakening macroeconomic forecast.
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A Citizens analyst writes, “Overall, we were encouraged by management’s outlook, which we believe was more balanced than some might have thought heading into results, not to mention some natural hedges in the business model are showing through.”
Analyst Devin Ryan adds that while the timing of deals depends on market conditions, Morgan Stanley’s management said that not much has changed in their business pipeline since the start of the year.
There’s still strong demand for strategic advice and help with raising capital. Although talk of tariffs is causing uncertainty and market swings, other factors — like potential changes to taxes and regulations — could turn out to be positive once there’s more clarity.
Citizens analyst believes pressure has been building in the markets for sponsors to transact, companies need to move on with strategic plans and IPO candidates, and that “backlog won’t simply go away.”
Citizens analyst maintains Market Perform rating.
Oppenheimer says the uplift from trading is reminiscent of benefits during COVID-19’s onset and suggests a bit of irony given how punitive these businesses are treated during annual stress tests.
Analyst Chris Kotowski says Oppenheimer is lowering the 2025 and 2026 asset management revenue forecasts due to recent market performance affecting asset balances. However, the company is increasing its net interest income outlook after a stronger-than-expected performance in the first quarter of 2025.
“Thus, potential upside surprises for 2Q25E and beyond remains from both elevated balances and rates remaining higher as we suspect the Fed will likely be constrained from drastic rate cuts,” Kotowski writes.
MS Price Action: Morgan Stanley stock is up 1.90% at $109.81 at the last check Monday.
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