Highlights

  • Morgan Stanley shows 29.33% basic EPS growth, a P/E of 14.24 and PEG of 0.95.
  • Third quarter 2026 net revenues were $20,338 million, against $18,224 million a year earlier.
  • Wealth Management net new assets were $232.4 billion and fee-based asset flows $80.5 billion.
  • Morgan Stanley repurchased $1.5 billion of common stock and declared a $1.15 quarterly dividend.

An undervalued growth stock pairs earnings growth with its P/E and PEG ratios, and Morgan Stanley (NYSE:MS) shows all three: basic earnings per share grew 29.33% over one year, the trailing twelve-month P/E ratio is 14.24 and the PEG ratio, on an expected basis, is 0.95, with shares trading at USD 190.03 on October 28, 2026, up 1.67%. Alongside those figures, the global financial services firm recorded severance costs of $178 million in the first quarter for a March workforce management action, repurchased $1.5 billion of common stock in the third quarter and reported third quarter 2026 net revenues of $20.3 billion on October 14.

Morgan Stanley is headquartered at 1585 Broadway in New York, New York, and incorporated in Delaware. It describes itself as a global financial services firm providing investment banking, securities, wealth management and investment management services, with offices in 42 countries, serving corporations, governments, institutions and individuals. It reports three business segments: Institutional Securities, Wealth Management and Investment Management.

Growth: Third Quarter 2026 Earnings, Segment Revenues and Client Assets

Net income applicable to Morgan Stanley was $4,909 million in the third quarter against $4,610 million a year earlier, and $16,057 million for the nine months against $12,464 million. Basic earnings per share were $3.07 against $2.83, and diluted earnings per share were $3.03 against $2.80. For the nine months, basic earnings per share were $10.03 against $7.61.

Net revenues were $20,338 million against $18,224 million. Institutional Securities net revenues were $10,029 million against $8,523 million, with Equity at $5,799 million against $4,116 million, up 41%, and Investment Banking up 2%.

Wealth Management net revenues were $9,065 million against $8,234 million, up 10%, with a pre-tax margin of 30.4%. Net new assets were $232.4 billion against $81.0 billion, and fee-based asset flows were $80.5 billion against $41.9 billion. Total client assets across Wealth and Investment Management were $10.5 trillion.

Valuation: P/E of 14.24, PEG of 0.95 and Returns on Equity

The P/E ratio of 14.24 is measured on trailing twelve-month earnings, and the PEG ratio of 0.95 is on an expected basis. Return on equity was 17.8% against 18.0%, and return on tangible common equity, a non-GAAP measure, was 22.6% against 23.5%. Book value per share was $68.59 against $62.98, and tangible book value per share, also non-GAAP, was $53.96 against $48.64.

On the third quarter call, Chairman and Chief Executive Officer Ted Pick said the quarter marked the fifth consecutive quarter of return on tangible equity above 20%.

Capital Returns, Capital Ratios and Funding

Morgan Stanley repurchased $1,540 million of common stock in the third quarter, about 7 million shares at an average price of $212.74, against $1,085 million a year earlier. The Board declared a $1.15 quarterly dividend per share payable on November 13, 2026 to shareholders of record on October 30, 2026.

The Standardized Common Equity Tier 1 capital ratio was 14.9% against 15.1% a year earlier, and the Advanced Approach ratio was 16.3%. The Tier 1 leverage ratio was 5.9% against 6.8%, and the supplementary leverage ratio was 4.8% against 5.5%. At September 30, 2026, total assets were $1,692,273 million, deposits were $478,377 million and long-term debt outstanding was $378,090 million.

Disclosed Risks and Outlook for the Fourth Quarter

The provision for credit losses was $148 million, with none in the year-earlier quarter, which the company attributed primarily to growth in corporate and secured lending. Net charge-offs of $105 million related to certain corporate and commercial real estate loans that had been largely provisioned in prior quarters. Fixed Income net revenues were $2,011 million against $2,169 million, down 7%.

Investment Management net revenues were $1,459 million against $1,651 million, down 12%, as the reversal of accrued carried interest on certain investments in a private fund reduced performance-based income and other to a loss of $106 million. Non-compensation expenses were $5,715 million against $4,754 million.

On the call, management said the third quarter unfolded in two phases, with renewed tensions in the Middle East and higher interest rates slowing market volumes as Labor Day approached. Mr. Pick described geopolitical conflict and AI acceleration as two known unknowns that will shape client behavior into the first half of 2027. Management expects a modest increase in Wealth Management net interest income in the fourth quarter, subject to rates and client behavior, a fourth quarter tax rate slightly above 23.3%, with full year guidance remaining unchanged.