Morgan Stanley (MS) Stock Forecast & Price Target

Morgan Stanley is well positioned because its diversified model is producing strong, broad-based earnings power, with 1Q26 EPS of $3.43, net revenues of $20.6B, and record Institutional Trading revenue of $8.6B, while Wealth Management delivered $8.5B of revenue and $118B of net new assets. The firm’s profitability remains exceptional, with core ROATCE of 28.0%, ROTCE of 27.1%, and a 30.4% Wealth Management pre-tax margin, supported by a 65% efficiency ratio, $51.58 in tangible book value per share, and 15.1% CET1 capital. Management’s confidence in AI as a productivity driver, durable private credit demand, and continued strength in trading, advisory, and deposits to $419B suggests the franchise can keep compounding shareholder value through capital returns and organic growth.

Morgan Stanley is vulnerable to its heavy dependence on market-sensitive businesses, where Sales & Trading, Wealth Management, and Investment Management can all weaken if asset prices fall or volatility shifts unfavorably. Although 1Q26 showed record EPS of $3.43, net revenues of $20.6 billion, and ROTCE of 27.1%, the firm’s Investment Management segment was a soft spot, with revenue down 4.3% year over year and performance-based income sharply lower. The outlook is also pressured by elevated regulatory, litigation, and human-capital risks, while credit losses rose to $98 million and the firm’s SLR fell to 5.0%, leaving less cushion if macroeconomic or geopolitical stress hits trading and banking activity.