Morgan Stanley (NYSE:MS) Stock Price $156 Rally, $14.1B Earnings, and M&A Momentum

NYSE:MS Stock Performance and Market Momentum

Morgan Stanley (NYSE:MS) closed at $156.39, just shy of its 52-week peak at $157.76, after an extraordinary run in 2025. Over the past year, MS delivered a 66.66% return, beating the S&P 500’s 17.67% and climbing another 27.1% year-to-date. The five-year return now stands at 264.82%, cementing its place among the top capital markets performers. With a market capitalization of $249.65 billion, the bank has overtaken Goldman Sachs in size, signaling how investor preference has shifted toward its steadier wealth management-driven business model. A real-time chart for MS is available here.

Earnings Growth and Revenue Expansion at NYSE:MS

Morgan Stanley reported second-quarter 2025 revenue of $16.79 billion, up from $15.38 billion a year earlier, reflecting an 11.1% YoY increase. Net income available to common shareholders reached $3.39 billion, with EPS at $2.13, comfortably beating estimates of $1.96. On a trailing twelve-month basis, MS generated $65.61 billion in revenue and $14.14 billion in net income, resulting in EPS of $8.84. Analysts expect EPS to rise to $8.92 in 2025 and $9.60 in 2026, underscoring steady mid-single-digit earnings growth. Revenue is projected to climb to $70.48 billion in 2026, from $67.27 billion this year.

Profitability, Margins, and Returns for NYSE:MS

Profitability remains strong, though slightly below Goldman Sachs’ levels. Morgan Stanley’s profit margin is 22.49%, with an operating margin of 34.12%. Return on equity sits at 14.13%, comfortably ahead of Goldman’s 12.74%, reflecting the advantage of MS’s asset-light, advisory-driven mix. Return on assets is modest at 1.16%, reflecting its large balance sheet. Efficiency remains a key differentiator, as recurring wealth management fees stabilize earnings across cycles.

Valuation and Market Multiples of NYSE:MS

At 17.71x trailing earnings and 16.29x forward earnings, MS trades at a premium to Goldman Sachs, which sits at a 14.93x forward P/E. Price-to-book is 2.54, and price-to-sales is 4.07, both elevated compared to historical levels and peer averages. Analysts’ consensus target stands at $143.65, below the current price of $156.39, implying that the stock may be overvalued by 8% against consensus models. However, some forecasts stretch toward $160, suggesting upside remains capped but not exhausted.

Balance Sheet, Capital Strength, and Dividends for NYSE:MS

The firm’s balance sheet remains highly levered, with $563 billion in cash and $479 billion in debt, translating to a debt-to-equity ratio of 438.5%. Liquidity is sufficient with a current ratio of 2.13, but leverage remains a structural feature of the model. Book value per share is $61.59, placing MS at a 2.5x price-to-book multiple. The dividend has been increased to $4.00 annually, representing a 2.56% yield, above GS’s 2.05%. The payout ratio of 41.9% provides room for gradual increases. Investors can track insider activity here.

Capital Markets, M&A Pipeline, and IPO Recovery for NYSE:MS

CEO Ted Pick emphasized in early 2025 that the M&A pipeline is the strongest it has been in a decade. Completed deals totaled $299 billion in the first half, though that was still 14% lower than the year before due to trade policy uncertainty. Healthcare and technology dominate the pipeline, while IPO activity shows signs of revival. So far, 188 IPOs have been filed in 2025, a 30% increase from 2024, with companies raising $25.2 billion, up 7.7% year-on-year. With the Federal Reserve shifting to rate cuts, conditions for dealmaking and equity issuance are improving, and Morgan Stanley stands positioned to capture market share as one of the leading global advisors.

Analyst Sentiment and Market Risks for NYSE:MS

Wall Street analysts are split. Many upgraded earnings forecasts in the past 30 days, with 20 upward EPS revisions versus 1 downward for 2025, reflecting confidence in steady growth. Price targets, however, remain cautious, with the average at $143.65, suggesting stretched valuation at current levels. Risks include overexposure to global equity markets, potential softness in advisory if tariffs escalate further, and the possibility that its premium multiple contracts if revenue growth slows below expectations.

Long-Term Outlook and Verdict on NYSE:MS

Morgan Stanley has transformed into a wealth and advisory powerhouse, delivering predictable cash flows and a stronger return profile than many peers. The dividend yield of 2.56% and the 63.9% one-year rally highlight its appeal to both income and growth investors. Yet at $156.39, above consensus target, the stock trades ahead of fundamentals. With forward P/E multiples at nearly 16.3x, compared to GS at 14.9x, investors are paying a premium for stability. Considering all metrics, NYSE:MS is a Hold at current levels. Long-term investors may retain positions for income and compounding, but new buyers face limited upside unless dealmaking and IPO cycles accelerate faster than expected.

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