When Morgan Stanley reports second-quarter earnings on Wednesday morning, investors will be asking not just how good the quarter was, but whether the bank can keep up the momentum.

Analysts expect Morgan Stanley will report adjusted quarterly earnings per share of $2.93 for the period ending June 30, according to estimates compiled by FactSet. That compares with adjusted earnings per share of $2.13 for the same period a year ago. Analysts anticipate revenue will come in at $19.7 billion for the second quarter, compared with $16.8 billion for the year-ago period.

Morgan Stanley's two primary businesses, investment banking and wealth management, have been performing well. The investment bank has benefited in the past year from a surge in dealmaking and private companies choosing to go public -- activities that generate fees for investment banks like Morgan Stanley. There have been 144 IPOs filed this year, a 9.1% increase from 2025, according to Renaissance Capital. The investment banking team at Morgan Stanley has landed plum assignments; the company was an underwriter for SpaceX's IPO, the largest in history. Expect Morgan Stanley executives to discuss the company's dealmaking pipeline. (It is an underwriter for sandwich shop Jersey Mike's planned IPO.)

The company's wealth management unit is coming off a strong first quarter when it posted record net revenues of $8.5 billion and hauled in net new assets of $118 billion. The unit generates substantial fees on assets under management, which likely rose during the quarter because of market appreciation and advisors bringing in new clients.

Morgan Stanley has touted its workplace benefits business as a pipeline of potential future clients. UBS analyst Erika Najarian says Morgan Stanley is a workplace provider to nine of the 10 private "unicorn" companies. And when companies go public, the IPO event can convert so-called paper wealth into liquid wealth, turning some employees lucky enough to own shares into millionaires.

However, the second quarter also includes tax season. That is typically a headwind for asset gathering for companies like Morgan Stanley because clients tend to pull money from their accounts to pay tax bills. "While last year benefited from strong [net new asset] performance, mega IPOs and workplace liquidity do not always flow through in a single quarter given timing and share-structure dynamics; we therefore pencil in $55 billion of [net new assets]," Najarian writes in a July 7 research note. She rates Morgan Stanley shares Buy.

In addition to net new assets, analysts will focus on whether wealth management's pretax margins remain above 30%, a key performance metric that could slip below that threshold because of seasonal trends. If it does, Bank of America analyst Ebrahim Poonawala says not to sweat it. In a July 12 note, he writes that a strong beat on net new assets, fees, or net interest income "likely trumps any disappointment from a lower pretax margin."

Shares of Morgan Stanley are up 29% this year compared with a 10% gain for the benchmark S&P 500 index.

Write to Andrew Welsch at andrew.welsch@barrons.com

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July 14, 2026 16:19 ET (20:19 GMT)

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