Morgan Stanley (MS.N): 2Q26 Preview – Favorable Environment Setting Up a Strong 2Q; Bar Might Be High, but We See Upside to ’26

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Morgan Stanley (MS.N): 2Q26 Preview – Favorable Environment Setting Up a Strong 2Q; Bar Might Be High, but We See Upside to ’26

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22 Jun 2026 16:05:00 ET │ 15 pages

Morgan Stanley (MS.N)

2Q26 Preview – Favorable Environment Setting Up a Strong 2Q; Bar

Might Be High, but We See Upside to ’26

CITI’S TAKE Neutral

We expect this to be a strong quarter and we raise our estimates as Price (18 Jun 26 16:00) US$223.17

favorable market performance helps fee-based growth in WM and ISG

Target price US$220.00↑ benefits from strong cap markets environment with added benefit of

recent IPOs. We see upside to consensus on a stronger top-line across all from US$194.00

businesses, with a partial offset on higher revenue-related expenses. MS Expected share price -1.4%

has been the top performer in our large-cap coverage since 1Q earnings return

and has seen among one of the strongest upward EPS revisions through Expected dividend yield 2.0%

the year (’26 cons estimates up ~13%), following a strong 1Q print and Expected total return 0.6%

optimism around cap markets and upcoming mega-deals. While long Market Cap US$352,003M

positioning over the past month likely sets a high bar into earnings (Figure

3), with upside to consensus on 2026 and slight upside into 2Q, we do see

room for WM and banking/trading to clear the bar. We raise our PT to

$220 on lower assumed cost-of-equity. Benjamin GerlingerAC

+1-212-816-3538

benjamin.gerlinger@citi.comEstimate Changes — Our 2026E EPS increases 20c to $12.25 (vs. FactSet consensus

of $11.88), 2027E EPS increases 25c to $12.65 (vs. FactSet consensus of $12.73), and Mikhail Mrotchek

2028E EPS increases 30c to $13.55 (see Figure 1 for more detail). MS reports 2Q26 +1-212-816-2345

earnings on July 15. misha.mrotchek@citi.com

Kaili Wang, CFA