Morgan Stanley: 2Q26 Follow-Up: Growth Engine Continues

Research evidence excerpt

Morgan Stanley: 2Q26 Follow-Up: Growth Engine Continues

USA | Brokers, Asset Mgrs & Exchanges

Morgan Stanley EquityJulyResearch16, 2026

TARGET | ESTIMATE CHANGE2Q26 Follow-Up: Growth Engine Continues

Post 2Q26 results, our EPS est's for 2H26 are flat and our FY27 is increasing RATING BUY

by +2%, following a record 1H in trading, along with favorable trends in WM. PRICE $228.55^

We expect momentum to continue driven by favorable IB trends, rising prime PRICE TARGET | % TO PT $261.00 ($252.00) | +14%

balances along with continued growth in WM and ongoing operating efficiency. 52W HIGH-LOW $232.25 - $135.27

FLOAT (%) | ADV MM (USD) 76.1% | 1,411.14

Sustainability of Workplace Momentum? - WM delivered record revs of $8.9B (+14% y/y) with a MARKET CAP $359.3B

30.5% margin, marking its 4th consecutive qtr above the 30% LT target. While the segment remains TICKER MS

the firm's crown jewel in terms of earnings durability, today's debate centered on the record $148B ^Prior trading day's closing price unless otherwise

NNA haul. More than half came from a concentrated group of workplace clients and windfalls from noted.

2Q's historic IPO-related stock plan vesting activity (SPCX). While material, we view this less as a

one-time event; but rather, evidence of a conversion engine built over years. MS@Work covers ~70%

FY (Dec) CHANGE TO JEFe JEF vs CONS

of the top-100 private unicorns, ~20M clients and has been bolstered by investments covering

2026 2027 2026 2027

the breadth of the cap table (See: EquityZen, Carta). As such, Workplace/E*Trade-to-Advisor AUM

REV +2% +3% -1% NM

is over $1.2T. While asset mgmt revs (in WM) may again benefit from positive beta in 3Q (1-mo

billing lag), a stronger market also expands future stock plan conversion opportunities.