Morgan Stanley Introduces Contingent Income Memory Auto-Callable Securities Linked to Chipotle (NYSE: MS-PQ)

Offering Details of the Securities

These newly issued securities are unsecured obligations of Morgan Stanley Finance LLC, fully guaranteed by Morgan Stanley. Classified as principal-at-risk securities, investors face the possibility of losing part or all of their principal. Unlike traditional debt instruments, these securities do not ensure principal repayment or regular interest payments.

Coupon payments are contingent upon Chipotle's stock meeting specified performance benchmarks, designed for investors willing to accept higher risk for potential above-market returns.

Contingent Coupon Payment Structure

The securities offer an annual contingent coupon rate of 17.64%. Payment depends on Chipotle's stock closing at or above a defined coupon barrier on scheduled observation dates. Failure to meet this threshold results in no coupon payment for that period.

Unpaid coupons due to stock performance below the barrier may be paid later if conditions are met on subsequent dates, adding complexity requiring investors to monitor stock performance closely.

Early Redemption Features

An automatic early redemption feature allows the securities to be redeemed if Chipotle's stock closes at or above a predetermined call threshold on specific redemption determination dates, starting November 3, 2026. Upon early redemption, investors receive their principal plus any applicable contingent coupons.

If the stock does not meet the call threshold on these dates, early redemption will not occur, adding uncertainty regarding investment duration and returns.

Investment Risks

These securities carry significant risks, notably principal loss. If Chipotle's stock closes below a specified downside threshold at maturity, investors will suffer losses proportional to the stock's decline, potentially receiving less than the initial principal or nothing.

Being unsecured and principal-at-risk, these securities require investors to carefully assess their risk tolerance and investment goals before investing.

Market and Investor Considerations

Chipotle's stock performance is crucial in determining investment outcomes. Investors should closely track market conditions and company performance, as stock price fluctuations directly impact coupon payments and early redemption likelihood.

Given current market dynamics, investors must evaluate their financial situations and strategies, understanding factors influencing Chipotle's stock to make informed investment decisions.

Pricing and Issuance Information

The securities have a stated principal of $1,000 each, with a total aggregate principal of $1,000,000. The issue price is $1,000 per security, with Morgan Stanley receiving net proceeds of $990,000 after commissions.

The original issue date is July 27, 2026, and the final observation date is August 3, 2027, defining payment schedules and investment duration.

Intended Investor Profile

These securities target investors comfortable with principal-at-risk products seeking higher returns through contingent coupons, suitable for those exploring alternatives beyond traditional fixed-income investments.

Prospective investors must conduct thorough due diligence and fully comprehend the terms detailed in the product supplement, tax supplement, and prospectus to align this investment with their financial objectives and risk tolerance.

Summary of the Offering

Morgan Stanley's Contingent Income Memory Auto-Callable Securities linked to Chipotle stock offer a distinctive investment opportunity combining potential high returns with significant risk, including possible principal loss.

Careful evaluation of the product structure, risks, and market factors is essential. Investors should maintain vigilance regarding Chipotle's stock performance and be prepared for the complexities inherent in this structured investment.