Wrapping up Q2 earnings, we look at the numbers and key takeaways for the investment banking & brokerage stocks, including Piper Sandler (NYSE: PIPR) 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%.
In light of this news, share prices of the companies have held steady as they are up 2.5% on average since the latest earnings results.
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. This print exceeded analysts’ expectations by 13.3%. Overall, it was an incredible quarter for the company with a beat of analysts’ EPS estimates.
Interestingly, the stock is up 2.4% since reporting and currently trades at $322.37.
Moelis (NYSE: MC)
Founded in 2007 by veteran banker Ken Moelis during the lead-up to the financial crisis, Moelis & Company (NYSE: MC) is an independent investment bank that provides strategic and financial advisory services to corporations, financial sponsors, governments, and sovereign wealth funds.
Moelis reported revenues of $365.4 million, up 38.1% year on year, outperforming analysts’ expectations by 17.5%. The business had an incredible quarter with a beat of analysts’ EPS estimates.
Moelis achieved the biggest analyst estimates beat and fastest revenue growth among its peers. However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $70.27.
Is now the time to buy Moelis? 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 2.9% since the results and currently trades at $95.83.
Read our full analysis of Charles Schwab’s results here.
LPL Financial (NASDAQ: LPLA)
As the nation's largest independent broker-dealer with no proprietary products of its own, LPL Financial (NASDAQ: LPLA) provides technology, compliance, and business support services to independent financial advisors and institutions who manage investments for retail clients.
LPL Financial reported revenues of $3.84 billion, up 30.8% year on year. This print topped analysts’ expectations by 1.9%. It was a strong quarter as it also produced a beat of analysts’ EPS estimates.
LPL Financial had the weakest performance against analyst estimates among its peers. The stock is down 8.3% since reporting and currently trades at $363.45.
Read our full, actionable report on LPL Financial here, it’s free.
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 beat analysts’ expectations by 4.8%. Overall, it was a very strong quarter as it also logged a beat of analysts’ EPS estimates.
The stock is up 4.9% since reporting and currently trades at $148.57.
Read our full, actionable report on Morgan Stanley here, it’s free.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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