As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the investment banking & brokerage industry, including Morgan Stanley (NYSE: MS) and its peers.
Investment banks and brokerages facilitate capital raises, mergers and acquisitions, and securities trading. The sector benefits from corporate activity during economic expansion, increased retail trading participation, and advisory opportunities in emerging sectors. Headwinds include economic cycle vulnerability affecting deal flow, compressed trading commissions due to electronic platforms, and regulatory capital requirements constraining certain higher-risk activities.
The 14 investment banking & brokerage stocks we track reported an exceptional Q2. As a group, revenues beat analysts’ consensus estimates by 7.7%.
Thankfully, share prices of the companies have been resilient as they are up 5.4% on average since the latest earnings results.
Morgan Stanley (NYSE: MS)
Founded in 1924 during the post-WWI economic boom by former JP Morgan partners, Morgan Stanley (NYSE: MS) is a global financial services firm that provides investment banking, wealth management, and investment management services to corporations, governments, institutions, and individuals.
Morgan Stanley reported revenues of $16.79 billion, up 11.8% year on year. This print exceeded analysts’ expectations by 4.8%. Overall, it was a very strong quarter for the company with a beat of analysts’ EPS estimates.
Interestingly, the stock is up 5.9% since reporting and currently trades at $150.00.
Is now the time to buy Morgan Stanley? Access our full analysis of the earnings results here, it’s free.
Best Q2: Piper Sandler (NYSE: PIPR)
Tracing its roots back to 1895 and rebranded from Piper Jaffray in 2020, Piper Sandler (NYSE: PIPR) is an investment bank that provides advisory services, capital raising, institutional brokerage, and research for corporations, governments, and institutional investors.
Piper Sandler reported revenues of $396.8 million, up 17% year on year, outperforming analysts’ expectations by 13.3%. The business had an incredible quarter with a beat of analysts’ EPS estimates.
The market seems happy with the results as the stock is up 7.5% since reporting. It currently trades at $338.42.
Is now the time to buy Piper Sandler? Access our full analysis of the earnings results here, it’s free.
Charles Schwab (NYSE: SCHW)
Founded in 1971 as a disruptive force challenging Wall Street's high fees and limited access, Charles Schwab (NYSE: SCHW) is a wealth management and brokerage firm that provides investment services, banking, and financial advice to individual investors and independent advisors.
Charles Schwab reported revenues of $5.85 billion, up 24.8% year on year, exceeding analysts’ expectations by 2%. It may have had the worst quarter among its peers, but its results were still good as it also locked in a beat of analysts’ EPS estimates.
Interestingly, the stock is up 4.4% since the results and currently trades at $97.20.
Read our full analysis of Charles Schwab’s results here.
Houlihan Lokey (NYSE: HLI)
Founded in 1972 and known for its expertise in complex financial situations, Houlihan Lokey (NYSE: HLI) is a global investment bank specializing in mergers and acquisitions, capital markets, financial restructurings, and valuation advisory services.
Houlihan Lokey reported revenues of $605.3 million, up 17.9% year on year. This print topped analysts’ expectations by 2%. Overall, it was an exceptional quarter as it also produced a beat of analysts’ EPS estimates.
The stock is up 4.5% since reporting and currently trades at $200.74.
Read our full, actionable report on Houlihan Lokey here, it’s free.
PJT (NYSE: PJT)
Spun off from Blackstone in 2015 and founded by former Morgan Stanley executive Paul J. Taubman, PJT Partners (NYSE: PJT) is an advisory-focused investment bank that provides strategic advice, restructuring services, and fundraising solutions to corporations, boards, and investment firms.
PJT reported revenues of $406.9 million, up 13% year on year. This result beat analysts’ expectations by 4.8%. It was a very strong quarter. The stock is flat since reporting and currently trades at $181.42.
Read our full, actionable report on PJT here, it’s free.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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