Looking back on investment banking & brokerage stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including PJT (NYSE: PJT) 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 5.7% on average since the latest earnings results.
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 print exceeded analysts’ expectations by 4.8%. Overall, it was a very strong quarter for the company with an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ advisory and servicing fees estimates.
The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $181.88.
Is now the time to buy PJT? 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 and a solid beat of analysts’ Investment Banking segment estimates.
The market seems happy with the results as the stock is up 11.1% since reporting. It currently trades at $349.64.
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 an impressive beat of analysts’ EBITDA estimates and a beat of analysts’ EPS estimates.
The stock is flat since the results and currently trades at $92.25.
Read our full analysis of Charles Schwab’s results here.
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 result surpassed analysts’ expectations by 4.8%. It was a very strong quarter as it also logged an impressive beat of analysts’ Institutional Securities segment estimates and a solid beat of analysts’ Wealth Management segment estimates.
The stock is up 10.7% since reporting and currently trades at $156.84.
Read our full, actionable report on Morgan Stanley here, it’s free.
Stifel (NYSE: SF)
Tracing its roots back to 1890 when the firm was established in St. Louis, Stifel Financial (NYSE: SF) is a financial services firm that provides wealth management, investment banking, and institutional brokerage services to individuals, corporations, and institutions.
Stifel reported revenues of $1.28 billion, up 5.4% year on year. This print topped analysts’ expectations by 4.2%. Overall, it was a very strong quarter as it also put up a beat of analysts’ EPS estimates.
The stock is up 3.3% since reporting and currently trades at $113.71.
Read our full, actionable report on Stifel here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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