Buffett Brain · Research note
Score updated 27 Oct 2026 · analysis from 1 Jun 2026
MS· Financial Services
Morgan Stanley
Morgan Stanley is a fine wealth manager strapped to a cyclical trading engine, and a 3.45 debt-to-equity load is the price of admission.
Buffett fit
Weak fit
Owner
38
Durability
77
Management
80
Price
67
Score updated 27 Oct 2026 · analysis from 1 Jun 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Financial Services stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If I owned all of Morgan Stanley, I would sleep better on the wealth-management fees than on the trading desk.
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The franchise has staying power. A durability score of 77 reflects a brand clients trust with their money and a fee stream that recurs year after year.
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This is the bright spot. A management score of 80 and a 3.1 percent annual reduction in shares tell me leadership returns cash rather than hoarding it.
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Here the picture is honest but not exciting. The stock trades at 17.6 times earnings, which is neither cheap nor dear for a quality franchise.
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
6- 1Management runs the place like owners, cutting the share count at a 3.1 percent annual rate.
- 2A management score of 80 reflects disciplined, shareholder-friendly .
- 3Recurring wealth-management fees support a durability score of 77.
- 4Revenue has compounded at a strong 18.8 percent annual rate.
Concerns
7- 1Financial health is the weak link, scoring just 26, with at 3.45 and net-debt-to-EBITDA at a heavy 9.58.
- 2Returns on capital are thin, with at 1.9 percent trailing and 2.8 percent over five years.
- 3A score of 38 says this is a business with thin, contestable advantages, not a fortress.
- 4Earnings are cyclical and fragile, having dropped as much as 23.7 percent in a single span.
Price history
$183+78.5%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Morgan Stanley makes its money two ways. It runs a large wealth and investment management business that collects steady fees on client assets, and it runs an institutional securities arm that earns from trading, underwriting, and advisory work. The blend produces a 58 percent and a 19.5 percent , but the trading half of the house swings with markets, and revenue that grew at an 18.8 percent clip can reverse just as fast.
How this analysis has moved
The call has held across 6 reviews.
Sep 27, 2026 → Oct 26, 2026
What other investors would say
The same company, judged by three other documented playbooks.
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