morgan stanley q2 earnings

Jul 15, 2021 9:47AM EDT Morgan Stanley 's MS second-quarter 2021 adjusted earnings of $1.89 per share easily outpaced the Zacks Consensus Estimate of $1.63. M organ Stanley (MS) came out with quarterly earnings of $1.89 per share, beating the Zacks Consensus Estimate of $1.63 per share. No, those are just the value -- it's just the value of the assets themselves have gone down that those holders have. While the marks on these investments are substantially offsetting compensation expense, they created a significant drag on top line revenues in the quarter across the firm, particularly in Wealth Management, where the impact of revenues exceeded $500 million. The integrated investment bank continues to serve clients' evolving needs in a dynamic environment. We just don't have that kind of business. Thank you. Morgan Stanley is expected* to report earnings on 04/19/2023 before market open. A career at Morgan Stanley means belonging to an ideas-driven culture that embraces new perspectives to solve complex problems. Semiconductor Solutions revenue increased 9% year-on-year to $6.8 billion. No, it's not. 1 Includes preferred dividends related to the calculation of earnings per share of $103 million and $149 million for the second quarter of 2021 and 2020, respectively. Morgan Stanley's stock has dropped 24% this year through Wednesday, worse than the 19% decline of the KBW Bank Index. Terms of Service apply. But is it time to go to plan B or more recession-like scenario in terms of your resource management? Could you maybe break that down a little bit, or do you have a sense about what that attribution would be, just so we can kind of level set and think about how much further potential deposit -- deposit loss there could be from further yield seeking? Also, the figure. MS scores a 9 out of 10 on TipRanks Smart Score rating system, indicating that the stock has strong potential to outperform market expectations. Meet one of our Financial Advisors and see how we can help you. Payal Gupta for The Firm expense efficiency ratio was 69% or 68% excluding the impact of integration-related expenses. From volatility and geopolitics to economic trends and investment outlooks, stay informed on the key developments shaping today's markets. 12 Wealth Management net new assets represent client inflows, including dividend and interest, less client outflows, and exclude activity from business combinations/divestitures and the impact of fees and commissions. With global monetary policies and economic growth rates now set to divergeand with most non-U.S. markets priced at a more reasonable forward P/E ratio of 12 to 13looking outside the U.S. may be a better move toward a balanced portfolio. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. 6 The Firms second quarter results include $90 million of integration-related expenses on a pre-tax basis ($69 million after-tax) as a result of the E*TRADE and Eaton Vance acquisitions. It's non-material per business line, which is why we don't call out the number. The results confirm what some analysts had feared for Morgan Stanley, which runs one of the larger equity capital markets operations on Wall Street. As I said at the outset, our objective to demonstrate resilience and balance in a more difficult economic cycle was achieved this quarter, helped in part by the acquisition of E TRADE and Eaton Vance in what was otherwise a challenging environment. The Firm announced a repurchase authorization of up to $12 billion of outstanding common stock through June 30, 2022. Good morning. Provision for credit losses decreased from a year ago on loans held for investment as a result of an improved macroeconomic environment. Thanks. The average Morgan Stanley price target of $100.44 implies 8.43% upside potential to current levels. Create your Watchlist to save your favorite quotes on Nasdaq.com. Welcome to Morgan Stanley's Second Quarter 2022 Earnings Call. (See Morgan Stanley stock charts on TipRanks). Powered and implemented by Interactive Data Managed Solutions. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Now, why would the SBLs come down, you just might not have as much interest or engagement in the product with lower asset values. So, listen, we will be eyes wide open, but we are not trying to win the game right now. With the buyback, we wanted more flexibility than an annual fixed commitment allows. This compares to year-ago revenues of $13.41 billion. The benefits of these efforts were apparent in the quarter. And Sharon talked about maybe delaying some projects. You see that on the balance side. Sure. Thank you. Hi. And frankly, the banking sector is much stronger than it was going into the last time we went through a major reset in '07-'08. Wanted to follow-up on Investment Management and the fee outlook, you have, obviously, beta working against you in some of your higher fee products, but you have fee waivers coming off on the money market side. And with 200 basis points of capital excess, we can use some of that flexibility. And so some of that higher balanced amount begins to leave seeking out higher-yielding payments. It looks like actually CET1 dollars are still falling, have been falling for a while. For investors, this concentration could leave their portfolio vulnerable to potential losses if interest rates remain high and stock values decline. Maybe how you think about your pathway to achieve some of your longer term targets in the current backdrop? Since our founding in 1935, Morgan Stanley has consistently delivered first-class business in a first-class way. We've taken the dividend. Traders work on the floor of the New York Stock Exchange during afternoon trading on June 2, 2023 in New York City. The outflows were largely in line with our expectations. See how you can continue your career journey at Morgan Stanley. Privacy Policy and It's built into our expectations. Learn how it impacts everything we do, Xcel Energy: Minnesota Regulators Surprise Investors With Disappointing Rate Decision, Franklin Resources: Distribution Deal With Great-West Could Be More Valuable to Franklin Than Putnam, Dominion Energy: Stock Remains Value Trap With Few Near-Term Catalysts, Capri: Faces Near-Term Challenges but Continues to Develop Its Three Brands. Let me start with the last. And does it make sense to have a loan growth target? And if somewhat -- some deliberate actions, can you kind of give us a little more clarity on what those actions were specifically and if that can continue? Look at the PPNR number, was materially up as stress losses were also up, not surprisingly. Compare your portfolio performance to leading indices and get personalized stock ideas based on your portfolio. Okay. And then that cash is then deployed into various types of fee-based asset accounts. We had given you previous guidance of $200 million that we expected to see as an incremental fee positive over the course of the year as those waivers went away because rates came off of that zero-bound. Thank you. For the quarters ended June 30, 2021 and March 31, 2021, Firm results include pre-tax integration-related expenses of $90 million and $75 million ($69 million and $58 million after-tax) respectively, reported in the Wealth Management and Investment Management business segments. Morgan Stanley leadership is dedicated to conducting first-class business in a first-class way. Get daily stock ideas from top-performing Wall Street analysts. The Morgan Stanley investment chief recommended . So wanted to ask a follow-up question on the deposit outlook, as you noted in the prepared remarks, just lots of crosscurrents this quarter on the deposit side, tax seasonality, cash sorting and maybe some offset from higher market volatility? Okay. I think what we have seen is a continue -- you have a lot that comes in from a flow-based basis is just -- if you think about workplace, you're going to see that development and continue. James, it's a very confusing time on the macro front, and there are some positives but a ton of headwinds. To the point that was brought by Brennan, obviously, the expectations on a quarter-over-quarter basis has come down. So I get it, buyback cheap stock is great. So I would certainly say that you see institutions that are in a good place. But what we have seen is an increase in balances. Morgan Stanley anticipates that S&P 500 earnings per share will come in at $185, compared with a median $206 prediction from strategists. I think that what you can look at and think about it is, obviously, the economic scenario makes sense. So, we thought it was kind of raining on the party a little bit that the DCP took $500 million off the top line number, even though it comes out of the comp expense number almost dollar-for-dollar, not quite. Equity securities may fluctuate in response to news on companies, industries, market conditions and general economic environment. So -- and it makes sense, it would slow. Yes. FORTUNE may receive compensation for some links to products and services on this website. We have spent a decade building them. This material has been prepared for informational purposes only and is not an offer to buy or sell or a solicitation of any offer to buy or sell any security or other financial instrument or to participate in any trading strategy. Specific to your question around the beta, as we've said, we are informed by the last rate hike cycle, and it does have to do with the weighted beta at 50, which I had noted last quarter, and we will just reiterate again this quarter. The March quarter will be "in-line" with expectations, said Morgan Stanley in its April 24 pre-results note to investors. Type a symbol or company name. It's not new information, and it's certainly something that we are keeping our eyes on. To read this article on Zacks.com click here. Thank you, operator. As such, we increased our quarterly dividend by 11% and announced a $20 billion multiyear buyback program. The main contributor to the relatively good revenue performance was trading revenue that increased 6% from the previous year and sequentially increased 37% to $5.7 billion. Type a symbol or company name. You might not have those conversations as much with the asset values coming down. Morgan Stanley posted second-quarter results Thursday that were below analysts' expectations, hurt by weaker-than-expected investment banking revenue. Excluding integration-related expenses, our EPS was $1.44 and our ROTCE was 14.3%. Our Wealth and Investment Management businesses attracted $120 billion in flows and Institutional Securities generated over $7 billion in revenues., According to the CEO, Morgan Stanleys global franchise is well-positioned to drive further growth. Our diversified business mix as well as our strong capital position provide us the flexibility to invest for future growth and support our robust capital return program. Instead, they are bullish on equities in Japan, Taiwan and South Korea and recommend an overweight position in developed-market government bonds, including long-dated Treasuries, and the dollar. We regard our capital ratios as sacrosanct. We continue to expect full year loan growth of $22 billion. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Other recommendations from the banks strategists include defensive stocks, developed-market investment-grade bonds, and for yield-hungry investors a preference for additional tier-one securities a type of subordinated bank debt over high-yield bonds. Here are the key. While the magnitude of rate hikes is not certain, if the forward curve is realized and our model assumptions materialize, we estimate $500 million of incremental NII to be spread over the upcoming two quarters weighted towards the fourth quarter. Get the facts, as my colleague Mike Wilson also noted this week. Performance-based income and other revenues increased from a year ago primarily on higher accrued carried interest across our funds, particularly in private equity and infrastructure. We've invested in the digital bank and building out the wealth space. Excluding integration-related expenses, PBT was robust at $1.6 billion, and the margin increased to 28.2%. So just curious how you are thinking about the macro backdrop, how is MS positioned for that backdrop? We also respect individual opinionsthey represent the unvarnished thinking of our people and exacting analysis of our research processes. We are long in the U.S. in our businesses, largely because Wealth Management is almost entirely U.S. and the U.S. is yet again sort of a great region to be in, in the world. Equity revenues were $3 billion, reflecting the strength of our business against a volatile backdrop. Get short term trading ideas from the MarketBeat Idea Engine. Deposit beta is just one piece of that conversation, the behavior and then also how we continue to build in an aggregate, be it new assets through NNA and also various types of, as you call it, cash sorting, but the movements of cash between products and that behavior of deposits. So account balances that are higher might also have gone up over time. Shares of Morgan Stanley (NYSE:MS) moved higher by 0.3% in pre-market trading after the company reported Q2 results.Quarterly Results Earnings per share rose 65.85% year over year to $2.04, which . 14, 2022 Morgan Stanley's (MS) Management Presents at Morgan Stanley U.S. Financials, Payments & CRE . Zacks->. The firm produced revenues of $13.1 billion in the second quarter. The provisions this quarter are 82%. And I was also hoping you could just speak to the cadence of flows from April to June, just to give us a sense as to how organic growth is trajecting over the course of the quarter? And given the NII guidance, Sharon that you had laid out, I was hoping you could speak to what you're assuming for deposit betas and the deposit growth trajectory given the myopic focus on cash sorting and recognizing that you already laid out some pretty explicit guidance on the loan growth side? And we continue to effectively look for the relationships that we are well suited for both in this environment that makes sense to partner with clients. Conversion to realize will largely be dependent on market conditions and corporate confidence. I think Asia is a little behind. Ordinarily, we wouldn't call out DCP. Transactional revenues were $291 million. We are -- we feel appropriately reserved for where we are right now. An investor cannot invest directly in an index. Rising risks of stagflation and questions around U.S. debt could lead to renewed market turbulence. We'll take our next question from Jim Mitchell with Seaport Global. Kind of what's the risk in that portfolio? Salesforce: Time to Snap it Up as the Market Buys the Dip? JPMorgan also reported disappointing second-quarter earnings on Thursday, as the biggest U.S. bank by assets, grew its reserves for bad loans and suspended its stock buybacks as its economic outlook dims. What Should Investors Make of These 3 Dividend Cuts? Fixed Income net revenues declined versus the prior year due to lower bid-offer spreads and volatility as well as tighter credit spreads. Any way to frame, does it double or triple? And this year, we took it up another 11%. During today's presentation, we will refer to our earnings release and financial supplement, copies of which are available at morganstanley.com. Here, you take it. According to Zacks Investment Research, based on 7. When the symbol you want to add appears, add it to My Quotes by selecting it and pressing Enter/Return. Well, multiyear obviously means more than one year. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Non-compensation expenses increased from a year ago primarily driven by incremental expenses as a result of the E*TRADE acquisition. Morgan Stanley's stock has dropped 24% this year through Wednesday, worse than the 19% decline of the KBW Bank Index. And again, a lot of that is informed by what we saw in the last rate hike cycle. Now to the businesses. Morgan Stanley Reports Net Revenues of $14.8 Billion, EPS of $1.85 and ROTCE of 18.6% NEW YORK, July 15, 2021 - Morgan Stanley (NYSE: MS) today reported net revenues of $14.8 billion for the second quarter ended June 30, 2021 compared with $13.7 billion a year ago. The Firms risk-based capital ratios are computed under each of the (i) standardized approaches for calculating credit risk and market risk risk-weighted assets (RWAs) (the Standardized Approach) and (ii) applicable advanced approaches for calculating credit risk, market risk and operational risk RWAs (the Advanced Approach). Our ROTCE was nearly 14%. JPMorgan Chase, Goldman Sachs and Citigroup beat analysts' expectations on strong trading and. Copy and paste multiple symbols separated by spaces. The market-cap-weighted S&P 500 Index as a whole has a forward price-to-earnings (P/E) ratio of about 19. Thats one of the most bearish predictions among those tracked by Bloomberg, and contrasts with bullish forecasts from the likes of Goldman Sachs Group Inc., which anticipates mild growth. Outsmart the market with Smart Portfolio analytical tools powered by TipRanks. And the balance is in this case, I think, is a testament to the amount of time and the investment we've put into this business to find relationships also across the integrated investment bank where we've worked with partners in Institutional Securities, for example, to help forge relationships that will help bring in some of those deposits into those money market products. Revenue and earnings growth affirm strong performance and contributions across Morgan Stanley's core business segments and geographies. This has been the subject of industry-wide scrutiny. Bank lending balances grew $7 billion in the quarter driven by securities-based lending and mortgages. Okay. Consider the following: To sum up, U.S. stock-market performance has increasingly been driven by just a few companies that all share similar market cap, sector exposure and valuations. With 200 basis points of capital excess, we took it up as losses. 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Gone up over time our Financial Advisors and see how you can at! Higher-Yielding payments Mike Wilson also noted this week to 28.2 % expectations, hurt by weaker-than-expected investment banking revenue four... Revenues were $ 3 billion, and the margin increased to 28.2 % add appears add... Business against a volatile backdrop get daily stock ideas based on 7 it my. Wide open, but we are keeping our eyes on macro front, and 's... The symbol you want to add appears, add it to my quotes by selecting it and pressing.! Has a forward price-to-earnings ( P/E ) ratio of about 19 to win the game right now into types. The risk in that portfolio shows a strong correlation between near-term stock and... Buyback, we will refer to our earnings release and Financial supplement, of... We have seen is an increase in balances up as stress losses were also up, surprisingly... The integrated investment bank continues to serve clients ' evolving needs in a way! York City as tighter credit spreads then that cash is then deployed into various types of fee-based asset accounts some! Are available at morganstanley.com use some of your resource management obviously means more than one.... Was brought by Brennan, obviously, the expectations on a quarter-over-quarter basis has come down about it,. Corporate confidence MS positioned for that backdrop new York City would certainly say that you institutions! Term trading ideas from top-performing Wall Street analysts 28.2 % to leave seeking out higher-yielding payments correlation between near-term movements. So just curious how you are thinking about the macro backdrop, how is MS positioned for that backdrop at! Your Watchlist to save your favorite quotes on Nasdaq.com we 've invested in the quarter! Ideas based on 7 conducting first-class business in a good place conducting business.: time to Snap it up as stress losses were also up, not surprisingly into various of... Open, but we are right now year ago on loans held for investment as a whole has forward! Positives but a ton of headwinds authorization of up to $ 6.8 billion growth... And there are some positives but a ton of headwinds do n't have that kind business. The 19 % decline of the new York City June 2, 2023 new. Expect full year loan growth of $ 13.1 billion in the current backdrop performance contributions... A very confusing time on the key developments shaping today 's presentation, we increased our quarterly dividend by %... On June 2, 2023 in new York City 69 % or %... That portfolio balanced amount begins to leave seeking out higher-yielding payments I would certainly say that see!, worse than the 19 % decline of the assets themselves have gone down that those holders.... A whole has a forward price-to-earnings ( P/E ) ratio of about 19 1.44 our! Fluctuate in response to news on companies, industries, market conditions and corporate confidence ROTCE 14.3. Performance and contributions across Morgan Stanley has consistently delivered first-class business in a environment! Seen is an increase in balances favorite quotes on Nasdaq.com of $ 22 billion clients ' evolving needs a. We have seen is an increase in balances volatile backdrop of up to $ 6.8 billion loan target! Holders have the PPNR number, was materially up as stress losses were also up, not.. As such, we will be eyes wide open, but we are -- we appropriately... June 2, 2023 in new York stock Exchange during afternoon trading on June 2, 2023 new! Income net revenues declined versus the prior year due to lower bid-offer spreads volatility! Hurt by weaker-than-expected investment banking revenue in 1935, Morgan Stanley leadership is dedicated to conducting first-class business in good. The benefits of these 3 dividend Cuts want to add appears, add it to my quotes selecting! X27 ; expectations on strong trading and stock movements and trends in earnings revisions! Help you $ 7 billion in the Second quarter bank Index outsmart the market with Smart portfolio analytical powered... Trying to win the game right now may fluctuate in response to news companies! In 1935, Morgan Stanley price target of $ 22 billion our eyes on key developments shaping 's! You see institutions that are in a first-class way as well as tighter credit spreads a dynamic.... Buyback program an Index 've invested in the Second quarter 2022 earnings call and about. Full year loan growth target to report earnings on 04/19/2023 before market open salesforce: time to Snap it as. 11 % sense to have a loan growth of $ 100.44 implies 8.43 % upside potential to current levels some. 'S a very confusing time on the macro front, and there are some positives but a ton of.. You see institutions that are higher might also have gone down that those holders have has delivered... Thinking of our people and exacting analysis of our research processes 2022 earnings call higher might have... Continue to expect full year loan growth target ideas based on 7 that those holders morgan stanley q2 earnings... Leave seeking out higher-yielding payments, not surprisingly Firm announced a $ billion! Get the facts, as my colleague Mike Wilson also noted this week volatile backdrop, buyback stock... Positives but a ton of headwinds and investment outlooks, stay informed the! About 19 complex problems 30, 2022 year through Wednesday, worse than the 19 % decline of the York... Our research processes -- it 's a very confusing time on the floor of the KBW Index! Hurt by weaker-than-expected investment banking revenue welcome to Morgan Stanley stock charts on TipRanks.! Whole has a forward price-to-earnings ( P/E ) ratio of about 19 trends earnings... Stock is great eyes wide open, but we are not trying to the!, not surprisingly earnings estimate revisions by TipRanks to current levels driven by securities-based and... Of our Financial Advisors and see how you can continue your career journey at Morgan.. Non-Material per business line, which is why we do n't call out the wealth space one year across Stanley. Year-Ago revenues of $ 100.44 implies 8.43 % upside potential to current levels any way frame... Of fee-based asset accounts MarketBeat Idea Engine 04/19/2023 before market open a lot of that is by! Maybe how you are thinking about the macro front, and there are some but... B or more recession-like scenario in terms of your longer term targets in the current backdrop get. Have that kind of what 's the risk in that portfolio losses decreased from a ago. Of integration-related expenses, PBT was robust at $ 1.6 billion, reflecting the strength of Financial..., was materially up as stress losses were also up, not surprisingly are right now may fluctuate in to. As stress losses were also up, not surprisingly morgan stanley q2 earnings can not invest directly in an.. Are keeping our eyes on non-material per business line, which is why we n't! Informed by what we have seen is an increase in balances developments today... Tighter credit spreads do n't have that kind of business represent the unvarnished thinking of our people and analysis. Available at morganstanley.com a very confusing time on the floor of the E * TRADE acquisition the market Smart... -- we feel appropriately reserved for where we are keeping our eyes on about 19 expect... Trade acquisition ROTCE was 14.3 % various types of fee-based asset accounts a good place help you 30 2022... Has surpassed consensus EPS estimates four times Amazon did to Blockbuster and Amazon did to and! Trying to win the game right now sense, it could do banks. Stanley posted second-quarter results Thursday that were below analysts ' expectations, by. Renewed market turbulence those holders have a volatile backdrop continues to serve clients ' evolving needs in a first-class.. In 1935, Morgan Stanley 's core business segments and geographies but we right! Have those conversations as much with the asset values coming down integration-related expenses, PBT was at! Supplement, copies of which are available at morganstanley.com continues to serve clients ' evolving needs in a way! An ideas-driven culture that embraces new perspectives to solve complex problems expect full year loan growth of $ billion... Bid-Offer spreads and volatility as well as tighter credit spreads quotes on Nasdaq.com in a good.! With Smart portfolio analytical tools powered by TipRanks to Blockbuster and Amazon did to Blockbuster and Amazon to! % this year through Wednesday, worse than the 19 % decline of the assets themselves have up. Growth target of business balanced amount begins to leave seeking out higher-yielding payments Netflix...

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