Morgan Stanley or Evercore: Which is a Smarter Bet Amid M&A Upcycle?

By Swayta Shah | February 24, 2026, 8:55 AM

Morgan Stanley MS and Evercore Inc. EVR represent two distinct, top-tier investment banking (IB) models. Morgan Stanley pairs advisory and capital markets strength with sizable wealth and asset management platforms that diversify earnings. Evercore is a leading independent advisory boutique, built around high-margin M&A and restructuring advice with a leaner balance sheet profile.

Both have shown resilience as M&A and IPO activity recovered in 2024-2025. With the IB outlook turning brighter, the main question is which stock offers the better risk-reward from here: Morgan Stanley or Evercore?

The Case for Morgan Stanley

Given the industry-wide turnaround in the IB business, Morgan Stanley’s performance has been impressive. The company’s IB fees soared 23% in 2025 and 35% in 2024 after plunging in 2023 and 2022. The year 2025 began on an optimistic note, but market sentiment cooled after Trump’s tariff policies launched on 'Liberation Day', casting a shadow over deal-making. The momentum has rebounded, as deal-making activity started picking up. Going ahead, a healthy global IB pipeline, an active M&A market, “reopening of the IPO market,” and the company’s leadership position will aid it amid the changing macro situation.

Moreover, Morgan Stanley’s trading business performance has been stellar over the past several quarters, given the uncertainty surrounding the tariffs and macroeconomic headwinds. As market volatility and client activity are expected to remain decent, the company’s trading business will likely continue to grow.

Morgan Stanley’s partnership with Japan’s Mitsubishi UFJ Financial Group, Inc. keeps supporting profitability. In 2023, the companies announced plans to deepen their 15-year alliance by merging certain operations within their Japanese brokerage joint ventures. These efforts have solidified the company’s position in Japan’s market. The company’s Asia region revenues surged 23% year over year to $9.42 billion in 2025.

Although Morgan Stanley leans heavily into the IB business, it has diversified into more stable, revenue-generating sources, such as asset and wealth management businesses, creating a more balanced revenue stream across economic cycles. The aggregate contribution of the wealth and asset management segments to total net revenues increased to nearly 54% in 2025 from 26% in 2010. As of Dec. 31, 2025, total client assets across both segments reached $9.3 trillion, bringing the company closer to its longstanding $10 trillion asset management target set by former CEO James Gorman.

The Case for Evercore

Evercore, though small in size, has established itself as a significant player in the IB space. The company generates most of its revenues from the Investment Banking and Equities business (which constituted 97% of total revenues in 2025). After subdued activity in 2022 and 2023, global M&As improved in 2024 and 2025 as both deal value and volume rose.

In 2025, M&A activity opened on an optimistic note, though sentiment briefly cooled, but rebounded as the year progressed. Looking ahead, transaction activity is expected to strengthen, supported by lower borrowing costs and increased focus on scale and AI integration. Investment Banking and Equities business witnessed a compound annual growth rate (CAGR) of 10.7% over the past five years (2020-2025).

Evercore is strengthening its IB business footprint by actively increasing staff. As of Dec. 31, 2025, the company employed more than 200 senior managing directors in the Investment Banking & Equities business. In February, the company acquired U.K.-based independent advisory firm, Robey Warshaw. This will bolster the company’s presence across EMEA and broaden its sector and product coverage.

EVR’s efforts to boost its client base in advisory solutions, diversify revenue sources and expand geographically will likely support IB revenue growth.

A small portion of Evercore’s business is wealth management. Though the division’s profitability has been hurt in recent years due to the disposal and restructuring of several related units, decent inflows, upbeat market performance and higher fees from clients are expected offer some support.