Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Interactive Brokers (NASDAQ: IBKR) and the best and worst performers in the investment banking & brokerage industry.
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%.
In light of this news, share prices of the companies have held steady as they are up 4.5% on average since the latest earnings results.
Interactive Brokers (NASDAQ: IBKR)
Founded in 1977 and known for its sophisticated trading technology and global reach across 150+ exchanges in 34 countries, Interactive Brokers (NASDAQ: IBKR) is a global electronic broker that provides low-cost trading and investment services across stocks, options, futures, forex, bonds, and other financial instruments.
Interactive Brokers reported revenues of $1.48 billion, up 14.7% year on year. This print exceeded analysts’ expectations by 6.3%. Overall, it was an exceptional quarter for the company with a beat of analysts’ EPS estimates and transaction volumes in line with analysts’ estimates.
Interestingly, the stock is up 5.1% since reporting and currently trades at $62.48.
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 6.8% since reporting. It currently trades at $336.12.
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 solid beat of analysts’ EBITDA estimates and a beat of analysts’ EPS estimates.
The stock is flat since the results and currently trades at $92.36.
Read our full analysis of Charles Schwab’s results here.
Evercore (NYSE: EVR)
Founded in 1995 as a boutique advisory firm focused on independence and client trust, Evercore (NYSE: EVR) is an independent investment banking firm that provides strategic advisory, capital markets, and wealth management services to corporations, financial sponsors, and high-net-worth individuals.
Evercore reported revenues of $838.9 million, up 20.7% year on year. This number beat analysts’ expectations by 16.7%. Overall, it was an incredible quarter as it also put up a beat of analysts’ EPS estimates and an impressive beat of analysts’ Investment Banking segment estimates.
The stock is up 10.1% since reporting and currently trades at $332.64.
Read our full, actionable report on Evercore here, it’s free.
Lazard (NYSE: LAZ)
Tracing its roots back to 1848 when it began as a dry goods merchant in New Orleans, Lazard (NYSE: LAZ) is a global financial advisory and asset management firm that provides strategic advice to corporations, governments, institutions, and wealthy individuals.
Lazard reported revenues of $769.9 million, up 12.4% year on year. This print topped analysts’ expectations by 9.5%. It was an incredible quarter as it also produced a beat of analysts’ EPS estimates and an impressive beat of analysts’ AUM estimates.
The stock is up 1.3% since reporting and currently trades at $55.65.
Read our full, actionable report on Lazard here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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