Morgan Stanley shares rise as Q1 profits top forecasts

(Sharecast News) - Shares in American banking giant Morgan Stanley rose strongly on Tuesday after the company beat forecasts with a 13% increase in first-quarter profits. Net income came in at $3.4bn for the first three months of the year, up from $3.0bn a year earlier, with earnings per share rising to $2.02 from $1.70, ahead of the $1.67 expected by analysts.

First-quarter revenues rose to $15.1bn, up from $14.5bn and beating the $14.4bn forecast, as revenues across the firm's three divisions all grew on last year.

Institutional Securities saw growth across the board with particular strength in equities as well as underwriting revenues, partially offset by lower results in Advisory; Wealth Management was helped by record asset management revenues due to the positive market environment; while Investment Management revenues grew as assets under managed reached $1.5trn, up from $1.36trn a year before.

The return on tangible common equity or ROTCE rose to 19.7% from 16.9% in the first quarter of 2023.

Ted Pick, the bank's chief executive who took over in January, said the "Morgan Stanley Integrated Firm model is delivering durable results".

"As a result of strong net new asset growth, the firm has reached $7trn of client assets across Wealth and Investment Management. Institutional Securities also saw strength across the markets and underwriting businesses," Pick said.

The stock was up 3.7% at $90.19 by 1046 ET.