Zinger Key Points
- Morgan Stanley's Q4 adjusted EPS of $2.22 beat expectations of $1.70, with net earnings doubling to $3.7 billion.
- Q4 sales rose 26% YoY to $16.22 billion, exceeding the $15.03 billion consensus, with equity revenues up 51%.
On Thursday, Morgan Stanley MS reported a fourth-quarter adjusted EPS of $2.22, up from $0.85 a year ago and beating the consensus of $1.70. Net earnings more than doubled from $1.52 billion to $3.7 billion.
The U.S. bank reported fourth-quarter revenue of $16.22 billion, up 26% year over year, beating the consensus of $15.03 billion.
The Firm's expense efficiency ratio was 71% in 2024 compared to 77% a year ago, reflecting stronger revenues and expense discipline. Certain expense items negatively impacted the prior year. The expense ratio decreased from 84% to 69% in the quarter.
Ted Pick, Chairman and CEO said, "An excellent fourth quarter with a 20% ROTCE followed three quarters of consistent execution for Morgan Stanley, capping off one of the strongest years in the Firm's history…Total client assets grew to $7.9 trillion across Wealth and Investment Management supported by markets and healthy net new assets."
Morgan Stanley delivered Return on Tangible Common Equity of 20.2% during the fourth quarter and 18.8% in 2024.
The provision for credit losses in the fourth quarter was $115 million, up from $3 million a year ago.
Institutional Securities reported net revenues of $7.3 billion compared with $4.9 billion a year ago. Sales in 2024 reached $28.1 billion, reflecting higher results across business lines and regions on strong client activity and improved market conditions.
Investment Banking revenues were up 25% from a year ago to $1.64 billion. Advisory revenues increased to $779 million on higher completed M&A transactions.
Equity net revenues reached $3.33 billion, up 51%. Increased client activity drove equity net revenues across business lines and regions, with notable strength in Prime Brokerage and regional strength in Asia.
Wealth Management reported net revenues of $7.5 billion in the current quarter compared with $6.6 billion a year ago.
Asset management revenues at $4.42 billion were a record on higher asset levels and the cumulative impact of positive fee-based flows.
Transactional revenues increased by 18%, excluding mark-to-market's impact on DCP investments. Higher levels of client activity drove the increase.
In 2024, investment Management reported net revenues of $5.9 billion driven by asset management revenues on higher average AUM. The year included long-term net inflows of $18 billion.
In the quarterly conference call, CEO Ted Pick said the bank will continue to grow the dividend prudently and opportunistically repurchase stock.
Price Action: At last check Thursday, MS stock was up 2.15% at $133.36 during the premarket session.
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