In what's shaping up to be a rather prosperous earnings season for banks and financial services companies, Morgan Stanley (MS +5.78%) reported better-than-expected quarterly results Thursday. After the company released fourth-quarter and full-year 2025 figures, grateful investors were trading the stock up by nearly 6% in mid-session action that day.
A good time for investment banks
For the quarter, Morgan Stanley's net revenue came in at $17.89 billion, which was a meaty 10% year-over-year increase. The company posted a more robust improvement in net income according to generally accepted accounting principles (GAAP), with a 19% rise to $4.4 billion, or $2.68 per share.
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Both headline metrics were well above the average analyst estimates. Collectively, pundits tracking Morgan Stanley stock were modeling $17.72 billion on the top line, and a GAAP per-share net profit figure of $2.41.
Thanks in no small part to frothy securities markets, the company's institutional securities reporting segment had a prosperous quarter. It grew net revenue by 9% to over $7.9 billion. A more significant improvement was posted by wealth management, up 13% to $8.4 billion. The third and final company segment, investment management, rose by 5% to $1.7 billion.
NYSE: MS
Key Data Points
Let your winners run, as they say
All things being equal, when the economy is moving in the right direction, investors are actively trading, and companies are listing on the stock exchange, Morgan Stanley tends to outperform.
It did exceptionally well in the fourth quarter, indicating that it's not only operating the right kind of business at the right time but also has a management team adept at squeezing out high growth from such situations. Investors were entirely justified in piling into the company's stock on Thursday.
