Key Takeaways
- Morgan Stanley fell 6% today, with Goldman Sachs and Citigroup down about as much, in a broad selloff with no company news behind it.
- Morgan Stanley leans on trading far more than JPMorgan Chase, which leaves it among the banks most exposed if trading and dealmaking cool.
- Morgan Stanley’s earnings fell sharply the last time markets cooled.
- The stock still trades well above its five-year average price to tangible book value.
Morgan Stanley (MS) is down 6% today, and the other big Wall Street banks are right there with it: Goldman Sachs (GS) is down 6%, and Citigroup (C) is off 5%.
None of them put out any news. The whole market is selling off, with the SPY down 4% and the QQQ down 6%, a day after Democrats’ midterm wins hit AI infrastructure stocks. JPMorgan Chase (JPM), with $1.6 trillion of average loans, is down a smaller 4%.
The more trading, the bigger the swing
Equities and fixed income trading brought in $7.8 billion of Morgan Stanley’s $20.3 billion of third-quarter revenue, nearly two-fifths. At JPMorgan, markets revenue was $10.3 billion of $50.9 billion, about a fifth.
Goldman is even more tied to stocks: its equities revenue jumped 72% to $6.44 billion in the third quarter, over a third of its $18.68 billion total. Citi’s $23.8 billion of third-quarter revenue grew across services, wealth, markets and banking, and it’s falling anyway. Investors are selling the whole group today.
Robinhood Markets (HOOD), down 10% today, makes most of its money from trading. Transaction-based revenue was $867 million of its $1.42 billion of third-quarter revenue, on record equity and options volumes. Morgan Stanley’s E*Trade serves the same kind of trader, but transactional revenue was just 14% of its wealth management revenue in 2025. No wonder Robinhood is falling harder.
TIKR tracks 26 analysts on Morgan Stanley. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Morgan Stanley, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Morgan Stanley’s Analyst Ratings
Earnings have been here before
Analysts expect Morgan Stanley’s earnings to keep climbing, to $14.61 a share by 2028.
Those estimates assume trading holds up, and CEO Ted Pick said on the third-quarter call that volumes were “slower across asset classes” after Labor Day.
The last time markets cooled, net income fell from $15.0 billion in 2021 to $9.09 billion in 2023.
Priced for the good times
Morgan Stanley traded at 3.5x tangible book value at Wednesday’s close. That’s well above its five-year average of 2.7x, though below July’s peak of 4.6x.
Wealth management, with revenue up 10% in the third quarter, is the real floor under the stock. But even after today’s drop, Morgan Stanley is priced for trading and IPOs to stay hot, and I’d expect more downside if the selloff drags on.
Of course, trading may not cool at all. Fourth-quarter results in mid-January will show whether it has.
So what is Morgan Stanley stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
