MS
MORGAN STANLEYNYSEValuation snapshot
Above base casePrice is between the base and bull cases.
Price captured with valuation · Valuation Sep 5, 2026
What drives MS's base case?
base-case thesisMorgan Stanley is gathering more client assets, producing more fee income, and gaining business in Institutional Securities. Those gains should support continued growth even after the unusually strong start to 2026 cools. Costs remain controlled near management's goals, while a meaningful portion of earnings is retained to support lending, technology, and regulatory capital.
What shapes the assumptions
Total client assets reached 10 trillion dollars in June 2026
Wealth and Investment Management client assets
Raises revenue growth
Full-year Institutional Securities revenue rose from 23.1 billion dollars in 2023 to 33.1 billion dollars in 2025
Institutional Securities revenue
Raises revenue growth
Full-year firm pre-tax profitability improved from 0.22 in 2023 to 0.31 in 2025
Firm pre-tax profitability
Raises operating margin
Wealth Management loans reached 195.7 billion dollars in June 2026
Capital needed for lending growth
Lowers reinvestment
Each driver links a business metric to the forecast assumption it shapes — the basis for this case, not investment advice.
Why the gap?
The market is pricing this as if revenue grows 8.4% a year. Over the last 5 years it grew 6.9% a year, so the price assumes about what it has delivered.
What else could explain it?›
- Or, holding growth steady
- the price is also consistent with a 34.1% operating margin, against the 31.0% assumed here.
- How confident is this estimate?
- Robustness 62.0/10 (Moderate) — some of any gap is our own uncertainty rather than disagreement.
- What would change the answer?
- Which assumption this valuation swings on, and by how much.
Many combinations of assumptions reproduce the same price. These are ways to read what the market might be expecting, not the market's actual view. How this is worked out
Research & assumptions
Inspect the valuation thesis, cases, risks, evidence, and model inputs.
View details
Research & assumptions
Inspect the valuation thesis, cases, risks, evidence, and model inputs.
Three independently researched cases generated automatically from published financials. Every assumption is justified and cited; the discount rate is computed from researched market inputs.
Company value drivers
Ranked operating metrics and the valuation assumptions they influence.
1. Total client assets, period end
Assets served by Wealth and Investment Management drive recurring management fees, lending opportunities, and client activity.
$10T
reported2. Wealth Management full-year pre-tax margin
This measures how efficiently Morgan Stanley converts its largest recurring-fee business's revenue into profit.
29.3%
reported3. Firm full-year expense efficiency ratio
The ratio measures non-interest expense consumed per unit of revenue, so a lower value generally supports higher profit.
68.0%
reported4. Wealth Management full-year net new assets
Net client inflows show whether the wealth franchise is gaining assets independently of market appreciation.
$356B
reported5. Institutional Securities full-year revenue
Revenue from investment banking, equities, fixed income, and related activities captures the largest source of cyclical upside and downside.
$33B
reportedBase inputs from financials
source period →Base revenue (TTM)
$78B
Diluted shares
1,569,000,000
Net cash
$81.4B
Bear
low confidence$147.11
IV / share
-32.4% vs $217.71
- Explicit cash flows
- $27.66
- Terminal value
- $67.57
- Net cash
- $51.89
- Intrinsic value / share
- $147.11
45.9% of the value rests on the terminal value.
Revenue growth4.0% → 3.0% → 3.0% → 2.5% → 2.0%medium
How derived: Revenue grew 0.21 year over year in the first half of 2026 after growing 0.14 in 2025, but this case assumes unusually active markets normalize and cyclical Institutional Securities revenue slows sharply.
Why this confidence: Two reported 2026 quarters ↑, Capital-markets cyclicality ↓, Five-year forecast horizon ↓
Measured by
- Total client assets, period end$10Treported
- Wealth Management full-year net new assets$356Breported
- Institutional Securities full-year revenue$33Breported
Evidence for
- Morgan Stanley's annual revenue was nearly flat in 2023, demonstrating that capital-markets activity can interrupt growth.[Morgan Stanley 2023 Form 10-K]· primary
Evidence against
- First-half 2026 net revenue increased 0.21 year over year, while second-quarter Institutional Securities revenue increased strongly across Equities and Investment Banking.[Morgan Stanley 2Q26 Form 10-Q]· primary
Operating margin27.0%medium
How derived: The firm's pre-tax margin improved from 0.22 in 2023 to 0.31 in 2025, but this case assumes weaker revenue absorption and continued technology and compensation spending return profitability toward the 2024 level.
Why this confidence: Three-year reported profitability history ↑, Revenue-sensitive compensation ↓, Unpredictable market-cycle conditions ↓
Measured by
- Total client assets, period end$10Treported
- Wealth Management full-year pre-tax margin29.3%reported
- Firm full-year expense efficiency ratio68.0%reported
- Institutional Securities full-year revenue$33Breported
Evidence for
- The firm's full-year pre-tax margin was 0.22 in 2023 and 0.28 in 2024, showing that the recent 0.31 result is not assured through a cycle.[Morgan Stanley 2025 Form 10-K]· primary
Evidence against
- The first-half 2026 efficiency ratio improved to 0.65, and second-quarter Wealth Management produced a 0.305 pre-tax margin.[Morgan Stanley 2Q26 earnings release]· primary
Tax rate25.0%medium
How derived: The reported effective tax rate was 0.225 in 2025 and 0.196 in the first quarter of 2026, but this case allows for fewer discrete benefits and a less favorable geographic earnings mix.
Why this confidence: Reported effective-tax-rate history ↑, Potential legislative and geographic-mix changes ↓
No tracked driver measures this assumption yet.
Evidence for
- Morgan Stanley warns that tax examinations and changes in tax law can materially affect the tax rate in individual periods.[Morgan Stanley 2025 Form 10-K]· primary
Evidence against
- The first-quarter 2026 effective tax rate was only 0.196, below both this assumption and the 0.225 full-year 2025 rate.[Morgan Stanley 1Q26 Form 10-Q]· primary
Reinvestment rate35.0%low
How derived: Morgan Stanley held a 0.149 standardized CET1 ratio at June 2026, but this case assumes regulatory uncertainty and balance-sheet growth require retaining 0.35 of after-tax operating profit.
Why this confidence: Reported regulatory-capital ratios ↑, Reinvestment is difficult to separate from funding for a bank ↓, Future capital rules remain uncertain ↓
Measured by
- Institutional Securities full-year revenue$33Breported
Evidence for
- Morgan Stanley's value creation is constrained by risk-based and leverage capital requirements, making retained capital an economic reinvestment requirement for growth.[Morgan Stanley 2025 Form 10-K]· primary
Evidence against
- At year-end 2025 the standardized CET1 ratio was 0.150 versus a stated requirement of 0.118, leaving an approximately 0.032 capital buffer.[Morgan Stanley 4Q25 strategic update]· primary
Terminal growth2.0%low
How derived: Management targets continued client-asset compounding and durable Institutional Securities share gains, but the bear case limits perpetual growth to 0.02 because mature financial services ultimately track slow nominal economic expansion.
Why this confidence: Mature-industry economics ↑, Perpetual forecast horizon ↓, Sensitivity to nominal economic growth ↓
Measured by
- Wealth Management full-year net new assets$356Breported
Evidence for
- Management acknowledges that its long-term objectives depend on normal markets and can be affected by macroeconomic, geopolitical, and regulatory conditions.[Morgan Stanley 4Q25 strategic update]· primary
Evidence against
- Total client assets increased from approximately 4.8 trillion dollars in 2020 to 9.3 trillion dollars in 2025, indicating a substantially stronger recent compounding record.[Morgan Stanley 4Q25 strategic update]· primary
Base
low confidence$202.80
IV / share
-6.8% vs $217.71
- Explicit cash flows
- $40.01
- Terminal value
- $110.90
- Net cash
- $51.89
- Intrinsic value / share
- $202.80
54.7% of the value rests on the terminal value — elevated dependency.
Revenue growth8.0% → 7.0% → 6.0% → 5.0% → 4.0%medium
How derived: After 0.14 revenue growth in 2025 and 0.21 growth in the first half of 2026, this independent base case assumes Wealth Management asset compounding and Institutional Securities share gains continue while unusually strong current activity gradually normalizes.
Why this confidence: Broad growth across all three segments ↑, Management's measured long-term objectives ↑, Cyclical starting point ↓
Measured by
- Total client assets, period end$10Treported
- Wealth Management full-year net new assets$356Breported
- Institutional Securities full-year revenue$33Breported
Price implies: 8.4% vs our 6.0% — one of several sets that fit this price
Evidence for
- Full-year 2025 revenue increased 0.14, with Institutional Securities, Wealth Management, and Investment Management all reporting record revenue.[Morgan Stanley 4Q25 earnings release]· primary
Evidence against
- Morgan Stanley identifies market, macroeconomic, competitive, and geopolitical conditions as risks that can materially reduce transaction and trading activity.[Morgan Stanley 2025 Form 10-K]· primary
Operating margin31.0%medium
How derived: The firm earned a 0.31 pre-tax margin in 2025 and improved its first-half 2026 efficiency ratio to 0.65, so the base case preserves the 2025 profitability level rather than extrapolating the exceptional first-half result.
Why this confidence: Current profitability matches the assumption ↑, Management efficiency and Wealth Management goals ↑, Profit variability across market cycles ↓
Measured by
- Total client assets, period end$10Treported
- Wealth Management full-year pre-tax margin29.3%reported
- Firm full-year expense efficiency ratio68.0%reported
- Institutional Securities full-year revenue$33Breported
Price implies: 34.1% vs our 31.0% — one of several sets that fit this price
Evidence for
- Full-year firm pre-tax margin improved to 0.31 in 2025, while Wealth Management reached 0.293.[Morgan Stanley 2025 Form 10-K]· primary
Evidence against
- The firm's pre-tax margin was only 0.22 in 2023, and management states that its profitability goals assume a normal market environment.[Morgan Stanley 4Q25 strategic update]· primary
Tax rate22.5%medium
How derived: The base case carries forward the 0.225 effective tax rate reported for 2025 because it sits between the 2024 rate of 0.231 and the unusually low 0.196 first-quarter 2026 rate.
Why this confidence: Stable three-year annual range ↑, Quarterly discrete tax items ↓
No tracked driver measures this assumption yet.
Evidence for
- Morgan Stanley reported effective tax rates of 0.219, 0.231, and 0.225 for 2023, 2024, and 2025, respectively.[Morgan Stanley 2025 Form 10-K]· primary
Evidence against
- The effective tax rate declined to 0.196 in the first quarter of 2026, showing that geographic mix and discrete items can move the rate materially.[Morgan Stanley 1Q26 Form 10-Q]· primary
Reinvestment rate28.0%low
How derived: The base case assumes 0.28 of after-tax operating profit is retained because Morgan Stanley has a sizable capital buffer and improving capital efficiency but must still fund lending, trading assets, technology, and regulatory growth.
Why this confidence: Disclosed capital buffer ↑, Improving revenue relative to risk-weighted-asset growth ↑, Bank reinvestment measurement ambiguity ↓
Measured by
- Institutional Securities full-year revenue$33Breported
Evidence for
- At year-end 2025 Morgan Stanley reported a 0.150 standardized CET1 ratio and an approximately 0.032 buffer over its 0.118 requirement, supporting continued investment without retaining all earnings.[Morgan Stanley 4Q25 strategic update]· primary
Evidence against
- Wealth Management loans increased from 159.5 billion dollars at year-end 2024 to 195.7 billion dollars at June 2026, requiring additional funding and regulatory capital.[Morgan Stanley 2Q26 earnings release]· primary
Terminal growth2.5%low
How derived: Management expects secular client-asset growth and durable share gains, but the base case limits perpetual growth to 0.025 to reflect Morgan Stanley's mature scale and long-run nominal economic constraints.
Why this confidence: Diversified recurring-fee businesses ↑, Mature global scale ↓, Perpetual forecast sensitivity ↓
Measured by
- Wealth Management full-year net new assets$356Breported
Evidence for
- Management's long-term plan is built around compounding client assets, expanding Wealth Management relationships, and durable Institutional Securities wallet-share gains.[Morgan Stanley 4Q25 strategic update]· primary
Evidence against
- Morgan Stanley states that long-term targets may be affected by unpredictable macroeconomic, market, geopolitical, legislative, and regulatory conditions.[Morgan Stanley 4Q25 strategic update]· primary
Bull
low confidence$271.19
IV / share
+24.6% vs $217.71
- Explicit cash flows
- $53.15
- Terminal value
- $166.14
- Net cash
- $51.89
- Intrinsic value / share
- $271.19
61.3% of the value rests on the terminal value — elevated dependency.
Revenue growth12.0% → 10.0% → 8.0% → 7.0% → 6.0%low
How derived: Second-quarter 2026 revenue grew 0.27 year over year and client assets reached 10 trillion dollars, so the bull case assumes sustained Institutional Securities share gains and fee-asset compounding before growth gradually moderates.
Why this confidence: Strong reported 2026 momentum ↑, Broad segment participation ↑, Unusually favorable markets and IPO-related flows ↓
Measured by
- Total client assets, period end$10Treported
- Wealth Management full-year net new assets$356Breported
- Institutional Securities full-year revenue$33Breported
Evidence for
- Second-quarter 2026 revenue increased 0.27 year over year, including record Institutional Securities revenue and a 0.14 increase in Wealth Management revenue.[Morgan Stanley 2Q26 earnings release]· primary
Evidence against
- Just over half of second-quarter Wealth Management net new assets came from IPO-related inflows in the Workplace channel, making part of the quarter's asset gathering unusual.[Morgan Stanley 2Q26 earnings release]· primary
Operating margin34.0%low
How derived: The firm produced a 0.34 pre-tax margin in the first quarter of 2026 and a 0.65 efficiency ratio in both reported 2026 quarters, so the bull case assumes scale benefits sustain that profitability.
Why this confidence: Current-quarter profitability supports the level ↑, Demonstrated operating leverage ↑, Assumption depends on sustained strong revenue ↓
Measured by
- Total client assets, period end$10Treported
- Wealth Management full-year pre-tax margin29.3%reported
- Firm full-year expense efficiency ratio68.0%reported
- Institutional Securities full-year revenue$33Breported
Evidence for
- The first-quarter 2026 firm pre-tax margin was 0.34, and the first-half efficiency ratio was 0.65 despite continued investment.[Morgan Stanley 1Q26 Form 10-Q]· primary
Evidence against
- Second-quarter 2026 compensation and non-compensation expenses both increased year over year, including higher technology and business-development spending.[Morgan Stanley 2Q26 earnings release]· primary
Tax rate20.0%low
How derived: The bull case rounds the first-quarter 2026 effective rate of 0.196 to 0.20 and assumes a favorable earnings mix and tax benefits persist without forecasting a further decline.
Why this confidence: Recent reported tax rate ↑, Reliance on one unusually low quarter ↓, Tax-policy uncertainty ↓
No tracked driver measures this assumption yet.
Evidence for
- Morgan Stanley reported a 0.196 effective tax rate in the first quarter of 2026.[Morgan Stanley 1Q26 Form 10-Q]· primary
Evidence against
- The full-year effective tax rate was higher in each of 2023, 2024, and 2025, at 0.219, 0.231, and 0.225, respectively.[Morgan Stanley 2025 Form 10-K]· primary
Reinvestment rate22.0%low
How derived: The bull case retains 0.22 of after-tax operating profit because fee-based growth and technology scale require less incremental capital, while the disclosed CET1 buffer funds measured balance-sheet expansion.
Why this confidence: Measured capital efficiency gains ↑, Large disclosed CET1 buffer ↑, High growth may demand more capital than assumed ↓
Measured by
- Institutional Securities full-year revenue$33Breported
Evidence for
- Management reported that Institutional Securities revenue growth since 2023 was approximately twice the growth in its average risk-weighted assets and supplementary leverage exposure.[Morgan Stanley 4Q25 strategic update]· primary
Evidence against
- Morgan Stanley must maintain regulatory capital against trading, lending, and operational risks, and its Wealth Management loan book continued expanding through June 2026.[Morgan Stanley 2Q26 Form 10-Q]· primary
Terminal growth3.0%low
How derived: The bull case assumes secular growth in advised assets, workplace relationships, private markets, and global client activity lets Morgan Stanley grow perpetually at 0.03, still far below its recent client-asset growth.
Why this confidence: Large addressable global wealth pool ↑, Multiple disclosed growth channels ↑, Perpetual above-inflation growth is difficult at scale ↓
Measured by
- Wealth Management full-year net new assets$356Breported
Evidence for
- Total client assets reached 10 trillion dollars by June 2026, while management identified private markets, workplace relationships, tailored lending, and global expansion as continuing opportunities.[Morgan Stanley 2Q26 earnings release]· primary
Evidence against
- Management expressly conditions its goals on a normal market environment and warns that external macroeconomic and regulatory factors cannot be predicted.[Morgan Stanley 4Q25 strategic update]· primary
Valuation robustness
reliability of the estimate, not a stock rating62 / 100 · Moderate
Formula v1.0.0. Higher means a more reliable estimate — not a recommendation.
Quality checks
Automated model-risk flags — warnings, not recommendations.
- The reinvestment assumption is low-confidence.→ reinvestment
- The terminal growth assumption is low-confidence.→ terminal growth
Per-share economics
Business growth after changes in the diluted share count.
| Period | Revenue growth | FCF/share | FCF/share growth | Shares | Share growth |
|---|---|---|---|---|---|
| Q3 2024 | 15.9% | — | — | 1.61B | -2.1% |
| Q1 2025 | 17.2% | — | — | 1.6B | -1.0% |
| Q2 2025 | 11.8% | — | — | 1.59B | -1.1% |
| Q3 2025 | 18.5% | — | — | 1.59B | -1.2% |
| Q1 2026 | 16.0% | — | — | 1.58B | -1.5% |
| Q2 2026 | 27.1% | — | — | 1.57B | -1.5% |
Valuation history every run
History builds as the valuation is recalculated — this is the first recorded run.
Market inputs researched
The latest available U.S. Treasury daily par yield curve reported a 0.0465 ten-year yield on 2026-09-04.
The market-data service reported Morgan Stanley's five-year monthly equity beta as 1.21 on 2026-09-04.
The latest published trailing-twelve-month adjusted-payout implied U.S. equity risk premium was 0.0418 on 2026-06-01.
Morgan Stanley common shares closed at 217.71 dollars on 2026-09-04.
Generated 9/5/2026, 5:40:12 PM · pipeline v1.2.0