Morgan Stanley (MS): What to Expect Before Earnings
2026-07-13 · By Lubin Danilo, founder of Lubin Investment
MS: see the full analysis on Lubin Investment
Morgan Stanley reports second-quarter 2026 earnings on July 15. My screener gives it 7 out of 10, driven by a thriving wealth management business, but my model judges the current price roughly 50% overpriced. Market expectations are high: earnings per share up more than 35% year over year.
Morgan Stanley, between Wall Street and wealth management
Morgan Stanley combines two main businesses: a classic investment bank (mergers and acquisitions, IPOs, trading on behalf of clients) and a wealth management business that has become, in recent years, the group's real growth engine, especially since acquiring brokers like E*Trade and Eaton Vance.
What my screener says: profitable, but mixed signals
In my 10-criteria screener, Morgan Stanley passes 7 points. Its net margin reaches 14.6% and revenue has grown 17.9% a year over 5 years, a solid pace for a major bank. The company actively buys back its own shares (-2.96% of share count a year). The negative signal to note: costs are growing faster than revenue over the recent period, a margin compression worth watching. Several cash-related criteria also remain uncalculable for a bank of this nature (an investment bank's free cash flow doesn't lend itself well to this kind of classic calculation).
Very high market expectations for this quarter
Analyst consensus expects earnings per share around $2.89, up 35.7% year over year, on revenue growth of 15.4%. Morgan Stanley has beaten expectations in each of its last four quarters, which is why prediction markets give it nearly a 90% chance of doing it again. Wealth management should remain the bright spot: asset-management-related revenue is expected up 16% year over year.
The price: a reasonable multiple, but judged expensive by my model
The stock trades at 15.2 times its annual cash flow, a multiple that looks nothing extravagant on the surface for a large diversified bank. Yet my model puts a reasonable buy price around $108.44, against a current price of $221.09: a 51% overvaluation at the current price. This calculation should be taken with caution for a bank, where cash flow data is less directly comparable to an industrial company.
What to watch on July 15
Morgan Stanley reports second-quarter results on July 15, before market open. Watch first: asset-under-management growth in wealth management (the group's real structural engine), equity trading activity (strong in Q1), and investment banking fees, boosted by an expected rebound in IPOs.
- Morgan Stanley reports Q2 2026 earnings on July 15, with high expectations (EPS +35.7% year over year per consensus)
- 7 out of 10 in my quality screener: solid revenue growth (17.9%/yr), but costs growing faster than revenue recently
- Wealth management remains the main growth engine since the E*Trade and Eaton Vance acquisitions
- The stock trades at 15.2 times its cash flow, a moderate-looking multiple, but my model flags it as 51% overpriced
- Watch on July 15: asset-under-management growth, equity trading, and a rebound in investment banking fees
FAQ
Why does Morgan Stanley only score 7 out of 10 despite good recent results?
My screener also grades the cost-to-revenue trend, and several classic free-cash-flow criteria remain hard to calculate for an investment bank, which mechanically limits the score on that front.
Is Morgan Stanley's price really 51% overvalued?
That's what my cash-based model says, but this calculation should be taken with caution for a bank: the cash flows of a markets business don't compare directly to those of an industrial or tech company.
What's Morgan Stanley's main growth engine today?
Wealth management, whose asset-management-related revenue is expected up 16% year over year this quarter, driven by the past E*Trade and Eaton Vance acquisitions.
Should you buy Morgan Stanley before its July 15 earnings?
Market expectations are already very high and the stock is judged expensive by my model. This is not personalized investment advice, do your own research.
MS: see the full analysis on Lubin Investment
About the author
Written by Lubin Danilo, founder of Lubin Investment. A self-taught individual investor, I find fundamental analysis fascinating, and it has delivered excellent results. For three years now, my performance has beaten the S&P 500. But analyzing every stock took too much time: sites with incomplete data, calculation methods and criteria never aligned with mine. And spotting the best stocks was just as time-consuming, even with my own well-defined checklist. So I put my software development background to work to build this software, base my investment strategy on its results, and share it with people who share the same passion as me. It judges a company's quality and its price separately, using criteria drawn from the financial literature (Warren Buffett, Michael Mauboussin, Aswath Damodaran).