Morgan Stanley Earnings: Good Start to Year From Recovery in Capital Markets

Morgan Stanley reported strong first-quarter results as the capital markets recovered, and the outlook remains positive. The company reported net income to common shareholders of $3.3 billion, or $2.02 per diluted share, on $15.1 billion of net revenues. The main areas of outperformance were investment banking of $1.6 billion—up 19% from the previous year and 12% from the seasonally strong fourth quarter—and trading with commissions of $6.1 billion, up 6% from the previous year and 38% sequentially. We don't anticipate making a material change to our $88 fair value estimate for narrow-moat Morgan Stanley, and we assess shares as fairly valued.