Morgan Stanley tops Wall Street estimates in the fourth quarter

Written by: Wajeeh Khan
January 20, 2021
  • Morgan Stanley tops Wall Street estimates in the fourth quarter.
  • The investment bank generated £9.95 billion of revenue.
  • Morgan Stanley reported £2.49 billion of net income in fiscal Q4.

Morgan Stanley (NYSE: MS) reported its financial results for the fiscal fourth quarter on Wednesday that topped analysts’ estimates for profit and revenue. The company attributed its hawkish performance to strong trading in recent months, and robust performance in wealth management and investment banking segments.

Morgan Stanley’s earnings report comes a day after peer Goldman Sachs also reported its quarterly financial results.

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Morgan Stanley shares jumped roughly 2% in premarket trading on Wednesday. At £55.90 per share, the stock has recovered sharply from a low of £20.36 per share in March 2020 when the COVID-19 crisis wreaked havoc on the global financial markets. The American multinational investment bank is now less than 20% down only from its record high. Learn more about how can you start trading on the stock market.

Morgan Stanley’s Q4 financial results versus analysts’ estimates

Morgan Stanley reported £2.49 billion of net income in the fourth quarter that translates to £1.32 per share. In the comparable quarter of last year, its net income was capped at a lower £1.61 billion or 95 pence per share.

In terms of revenue, the investment bank reported £9.95 billion. According to FactSet, experts had forecast the company to print a much lower £7.98 billion of revenue in the recent quarter. Their estimate for per-share earnings stood at 95 pence per share.

In the prior quarter, Morgan Stanley had recorded £8.56 billion of revenue and £1.22 of earnings per share, as per the report published in October.

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Other prominent figures in Morgan Stanley’s earnings report

At £5.13 billion, investment banking revenue in Q4 jumped 46% on an annualised basis. Sales and trading revenues, on the other hand, came in at £3.09 billion that represents a 32% year over year growth. The New York-based bank generated £4.17 billion of revenue from its wealth management division versus the year-ago figure of £3.37 billion.

Morgan Stanley’s net interest income in the recent quarter registered at £880 million. In the same quarter last year, its net interest income stood at a lower £760 million. Investment management revenue slid from £1.02 billion last year to £810 million in the fiscal fourth quarter.

Morgan Stanley performed largely upbeat in the stock market last year with an annual gain of close to 35%. At the time of writing, it is valued at £99.30 billion and has a price to earnings ratio of 12.65.