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MS, Morgan Stanley

Capital Markets & Asset Management financial

Morgan Stanley is a global investment bank and wealth manager. It advises companies, governments, and institutions on mergers and on raising money, trades stocks, bonds, and other securities for clients, and manages money and runs brokerage accounts for individuals and institutions. It earns advisory and underwriting fees, trading profits, and recurring fees charged on the client assets it oversees.

Latest annual: FY2025 10-K

MS · Morgan Stanley

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$70.6B

+14.4% YoY · 8% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $78.0B 5-yr avg $60.0B

Return on equity 17% 5-yr avg 12%

Return on tangible equity 22% 5-yr avg 16%

Efficiency ratio 66% 5-yr avg 71%

Equity / assets 6.9% 5-yr avg 8.4%

Next report By 11/8 · the 10-Q for the quarter ended late September · due within 40 days of period end · has filed ~35 days after · the wire records it on arrival

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

What moves the needle: The question is how much of the earnings comes from fee-based wealth and asset management — money charged on client balances, where moving is a chore and a franchise would show in steady margins — versus trading and deal-making, which swing with markets and arrive when capital markets are open and dry up when they are not. Watch whether scale and reputation let it hold pricing as rivals chase the same mandates, since this is a business where competitors compete the fee away. Watch too the leverage it runs, because a firm funded with borrowed money lives on confidence, and a frozen market, a soured trade, or a regulatory penalty can erase a good year. The reinvestment runway is winning client assets and selling more to them, not building plants, so the test is whether the assets stay and compound.
Is it a good business?: Return on equity has hovered around the cost of equity (median 11%, above 12% in 3 of 10 years). It runs at a 66% efficiency ratio, about average. The cycle and the loan book decide this one; weigh the recession years in the record, not the average, and read the 10-K.

Drafted from the company's filings and reviewed by hand; every number is shown in full in the sections below.

The record

Ten years of arithmetic, read across the cycle.

The record, 2016–2025

realized figures from each filing · older years to the left

2016’16	2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMJun 2026
											Income statement
$34.6B	$37.9B	$40.1B	$41.5B	$48.8B	$59.8B	$53.7B	$54.1B	$61.8B	$70.6B	$78.0B	RevenueRevenue
$7.0B	$9.0B	$13.9B	$17.1B	$10.2B	$9.4B	$21.6B	$45.8B	$54.1B	$59.1B	—	Interest incomeInt. inc.
$3.3B	$5.7B	$10.1B	$12.4B	$3.8B	$1.4B	$12.3B	—	$45.5B	$49.0B	—	Interest expenseInt. exp.
$3.7B	$3.3B	$3.8B	$4.7B	$6.3B	$8.0B	$9.3B	$8.2B	$8.6B	$10.0B	$10.8B	Net interest incomeNet int.
$30.9B	$34.6B	$36.3B	$36.8B	$42.4B	$51.7B	$44.3B	$45.9B	$53.1B	$60.6B	$67.2B	Noninterest incomeFee inc.
$131M	$22M	($24M)	$120M	$558M	($48M)	$216M	$488M	$146M	$230M	$203M	Credit-loss provisionProvision
$8.8B	$10.4B	$11.2B	$11.3B	$14.4B	$19.7B	$14.1B	$11.8B	$17.6B	$22.0B	—	Pretax incomePretax
$6.0B	$6.1B	$8.7B	$9.0B	$11.0B	$15.0B	$11.0B	$9.1B	$13.4B	$16.9B	$20.2B	Net incomeNet inc.
31%	40%	21%	18%	22%	23%	21%	22%	23%	22%	22%	Effective tax rateTax rate
											Cash flow & returns
0.7%	0.7%	1.0%	1.0%	1.0%	1.3%	0.9%	0.8%	1.1%	1.2%	1.2%	Return on assetsROA
8%	8%	11%	11%	11%	14%	11%	9%	13%	15%	17%	Return on equityROE
6%	5%	8%	8%	8%	10%	6%	3%	7%	9%	11%	Retained to equityRetained/eq
9%	9%	12%	13%	13%	19%	15%	12%	16%	19%	22%	Return on tangible equityROTCE
74%	73%	72%	72%	69%	67%	73%	77%	71%	68%	66%	Efficiency ratioEffic.
$1.7B	$2.1B	$2.4B	$2.6B	$2.7B	$4.2B	$5.4B	$5.8B	$6.1B	$6.6B	$6.8B	Dividends paidDiv. paid
($19.5B)	($12.4B)	($22.9B)	($33.6B)	($37.9B)	($49.9B)	($11.6B)	($3.1B)	($29.5B)	($46.8B)	—	Investing cash flowInv. cash
$7.4B	$16.3B	$24.2B	($12.0B)	$83.8B	$41.5B	$22.7B	($2.7B)	$46.8B	$67.8B	—	Financing cash flowFin. cash
($1.4B)	$3.7B	($1.8B)	($271M)	$2.8B	($3.5B)	($4.3B)	$451M	($2.5B)	$3.2B	—	Exchange-rate effectFX
($8.2B)	$3.0B	$6.8B	($5.0B)	$23.5B	$22.1B	$402M	($38.9B)	$16.2B	$6.3B	—	Change in cashΔ cash
											Balance sheet
$82.0B	$93.2B	$100.1B	$118.4B	$138.6B	$175.0B	$199.8B	$204.6B	$226.9B	$269.9B	—	Loans held for investmentLoans
$274M	—	—	—	$835M	$654M	$839M	$1.2B	$1.1B	$1.1B	—	Credit-loss allowanceAllowance
$814.9B	$851.7B	$853.5B	$895.4B	$1.12T	$1.19T	$1.18T	$1.19T	$1.22T	$1.42T	$1.68T	Total assetsAssets
$155.9B	$159.4B	$187.8B	$190.4B	$310.8B	$347.6B	$356.6B	$351.8B	$376.0B	$415.5B	$446.1B	DepositsDeposits
$6.6B	$6.6B	$6.7B	$7.1B	$11.6B	$16.8B	$16.7B	$16.7B	$16.7B	$16.7B	$17.1B	GoodwillGoodwill
$737.8B	$773.3B	$772.1B	$812.7B	$1.01T	$1.08T	$1.08T	$1.09T	$1.11T	$1.31T	—	Total liabilitiesTotal liab.
$76.0B	$77.4B	$80.2B	$81.5B	$101.8B	$105.4B	$100.1B	$99.0B	$104.5B	$111.6B	$116.3B	Shareholders’ equityEquity
											Per share
1.89B	1.82B	1.74B	1.64B	1.62B	1.81B	1.71B	1.65B	1.61B	1.59B	1.57B	Shares out (diluted)Shares
$3.17	$3.36	$5.03	$5.51	$6.77	$8.29	$6.44	$5.52	$8.31	$10.59	$12.81	EPS (diluted)EPS
$0.93	$1.14	$1.37	$1.60	$1.69	$2.30	$3.15	$3.50	$3.81	$4.14	$4.31	Dividends / shareDiv/sh
$40.30	$42.50	$46.17	$49.73	$62.67	$58.13	$58.46	$60.17	$64.87	$70.12	$73.95	Book value / shareBVPS
$35.37	$37.53	$41.08	$44.08	$52.44	$44.24	$44.29	$45.73	$50.50	$55.84	$59.35	Tangible book / shareTBVPS

Per-share growththe realized rate an owner's share compounded

	9-yr	5-yr
Revenue / share	+10.3%/yr	+8.1%/yr
EPS	+14.3%/yr	+9.4%/yr
Dividends / share	+18.1%/yr	+19.7%/yr
Book value / share	+6.3%/yr	+2.3%/yr

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Is it a good business?

Return on equity 15%

Strong

Net income $16.9B ÷ equity $111.6B

Industry peers: median 13%

What this means
The bank's north star, what it earns on shareholders' capital. Cost of equity is roughly 10%, so a return durably above that builds value and below it destroys it. One year is noisy; the durability across a full credit cycle is what counts.
Return on tangible equity 19%

Very high (≥18%)

Net income ÷ (equity − goodwill $16.7B − intangibles $6.0B)

Industry peers: median 18%

What this means
The cleaner return, stripping out the goodwill paid for past acquisitions. This is the number a buyer of the whole bank actually earns on the hard capital.
Efficiency ratio 68%

Average

Noninterest expense $48.3B ÷ (net interest income + fees)

Industry peers: median 76%

What this means
The share of revenue eaten by running costs; lower is better, and below about 60% marks a genuinely efficient operation. A low ratio held for years is the operational side of a moat.

Is it sound?

Capital (equity / assets) 7.9%

Modest

Equity $111.6B ÷ assets $1.42T

What this means
A plain-English leverage read: how much of the balance sheet is the owners' own money. This is a rough proxy; the regulatory figure is the CET1 ratio, which is risk-weighted and reported in the filing. The point is the same, how much loss the bank can absorb before depositors are at risk.
Deposit funding 29%

Leans on wholesale funding

Deposits $415.5B ÷ assets $1.42T

What this means
Low-cost, sticky deposits are a bank's real moat, the cheap raw material it lends out at a spread. A bank funded mostly by deposits earns more durably than one that rents its money in the wholesale market.
Credit cost (provision / NII) 2%

Low

Provision for credit losses $230M ÷ net interest income $10.0B

What this means
What the bank set aside this year against loans going bad, as a share of its lending income. This swings hard with the cycle, low in good years and spiking in recessions, so read it across the record, not in one year. Disciplined underwriting shows up as low, stable provisions through a downturn.

The franchise and the credit cycle

Deposit franchise —

Not enough data

What this means
The deposit mix isn't cleanly tagged in the filings' structured data; the funding read above carries what is.
Net charge-offs 0.08%

Disciplined book

Charge-offs net of recoveries $192M ÷ loans $248.4B (avg of year-ends) · worst year on record 0.10% · allowance held at 0.42% of loans

What this means
Loans actually written off, net of what was later recovered — the realized truth the provisions were guessing at. Graham's rule applies doubly here: the worst year in the record, not the average, is the read, because a loan book's sins are committed in the good years and confessed in the bad ones.
Held-to-maturity marks 8%

Manageable

Pre-tax, as filed for FY2025: HTM at cost $53.1B − fair value $45.6B = $7.5B, against tangible equity (preferred not deducted) $88.9B · widest on record FY2021: $22.6B (67% accreted back since)

What this means
Bonds held to maturity are carried at cost, so rate rises open a gap that only shows in this disclosure. Stated equity already carries every available-for-sale mark through accumulated other comprehensive income; the held-to-maturity book's gap sits outside equity, which is why it is read here. The figure is pre-tax as the filer states it — the true after-tax dent depends on a deferred-tax position the record does not carry. The gap never hits earnings if the bank can hold on, which is precisely why the reader checks whether it could be forced to sell: the 2023 bank failures were this number meeting deposit flight.

All figures as filed; the source filing is linked above.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Chief executive	Pay, as filed	“Actually paid”	Net income
2021	James P. Gorman	$34.9M	$81.9M	$15.0B
2022	—	$39.4M	$31.4M	$11.0B
2023	—	$33.0M	$41.9M	$9.1B
2024	Edward Pick	$24.9M	$64.5M	$13.4B
2025	—	$37.2M	$92.9M	$16.9B

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Net income is the whole business's, as filed, for the same fiscal years. A dash under the name means the filing tags the figure without naming the officer.

CEO pay ratio273:1
What the chief earns for every dollar the median employee makes, per the 2026 proxy. A high ratio alone settles nothing; some businesses are genuinely top-heavy in scarce skill. A runaway figure is where Buffett starts asking whether the board is doing its job.
Stock-based compensation$1.9B
The slice of the business handed to employees in shares in fiscal 2025, 2.7% of revenue, equal to 2.7% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

What an owner would ask, FY2025

read the 10-K →

Which reported numbers are a judgment call?
Management names Income taxes, Acquisitions, Contingencies as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →

The questions the record and the charts do not answer on their own; each carries the figure and the place to look.

Peers, Capital Markets & Asset Management

The same industry, side by side on the bank lens. Each column names the period it is read over; the group median at the foot is the line to read each figure against.

Company	Revenuelatest FY, USD	ROEmedian over the record	ROTCEmedian over the record	Efficiencymedian over the record	NII / assetsmedian over the record	Noninterest-bearing sharelatest FY
AXPAmerican Express Company	$72.2B	30%	35%	73%	4.3%	1%
MSMorgan Stanley	$70.6B	11%	13%	72%	0.6%	—
GSGoldman Sachs Group Inc. (The)	$58.3B	10%	10%	65%	0.4%	—
SCHWCharles Schwab Corporation (The)	$23.9B	13%	18%	—	1.9%	0%
RJFRaymond James Financial Inc.	$14.1B	16%	18%	82%	2.1%	1%
NMRNomura Holdings Inc ADR	$13.6B	7%	7%	79%	0.1%	—
SFStifel Financial	$6.3B	12%	17%	—	—	1%
XPXP Inc.	as filed: R$7.4B	22%	22%	—	—	—
Group median	—	12%	18%	73%	1.3%	—

The price

What a price has to assume.

What the price implies

price / tangible book

A bank is worth a multiple of its tangible book value, and the multiple it deserves is set by the return it earns on that book. Type today’s price; we show what you would be paying against what Morgan Stanley’s record justifies.

Today’s price $

The assumptions Cost of equity 10% Long-term growth 3%

Tangible book / share, delivered2%/yr’20→’25

The justified multiple is (return on tangible equity − growth) ÷ (cost of equity − growth). A bank earning exactly its cost of equity is worth about one times tangible book; the premium above that prices each point of durable excess return. A higher cost of equity lowers the justified multiple for a bank.

Enter a price above to run it.

Price / tangible book—

Justified by the return—

Normalized return on tangible equity13%

Price / book—

Earnings yield—

P/E (3-yr avg ’23–’25)—

Graham’s price gate—

Graham applied the same standards to financial enterprises (Intelligent Investor ch.14): the 15× multiple cap on averaged earnings, and P/E times price-to-book at most 22.5. The gate marks the bargain-hunter’s floor, not a verdict.

Tangible book $93.4B on 1571M shares, a 13% normalized return on it. The dials set the multiple such a return would justify; your price sets the multiple you are paying. It assumes the bank keeps earning that return; a credit cycle, a rate shock or a bad acquisition changes it, which is what the record and the 10-K are for.

Weigh MS against another business →

Cite: Owner Scorecard, "Morgan Stanley (MS), the owner's record," https://ownerscorecard.com/c/MS, data as of 2026-08-17.

Manual order: ← MRVL its page in the Manual MSA →

Industry order: ← MRX the Capital Markets & Asset Management chapter MSTR →