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Morgan Stanley Shows Goldman Sachs How It’s Done

July 19, 2017

[Photo:  MS Sydney, Australia HQ - by Alex Proimos / wikimedia commons]


Morgan Stanley reported Q2 earnings that easily beat Wall Street expectations: earnings per share of 87¢ vs. 76¢; revenues of $9.5 billion vs. $9.1 billion. While reporting gains across most of its businesses, Morgan Stanley particularly benefitted from an increase in stock trading and profits from its wealth management business.


In a more glaring observation, Morgan Stanley generated more trading revenue than rival Goldman Sachs. Equity sales and trading net revenues increased by $100 million to $2.2 billion - little changed from a year ago but up 7% from Q1. And, for the second quarter in a row, Morgan Stanley's fixed income trading revenue topped that of Goldman Sachs. While bond trading revenues fell 4%, that decline was less than what most of its rivals have experienced and the $1.3 billion in bond trading revenues exceeded CEO James Gorman’s $1.0 billion target. 


The positive results appear to vindicate Morgan Stanley and its chief executive, who have been steadfast in their strategy to remain a major player in trading while growing wealth management. Based on the bank’s recent string of successes, Evercore ISI analyst Glenn Schorr noted:  “Love it when a plan comes together.”