Earnings results often indicate what direction a company will take in the months ahead. With Q3 behind us, let’s have a look at 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 16 investment banking & brokerage stocks we track reported a very strong Q3. As a group, revenues beat analysts’ consensus estimates by 4.2% while next quarter’s revenue guidance was in line.
In light of this news, share prices of the companies have held steady as they are up 2.4% 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 $479.3 million, up 33.3% year on year. This print exceeded analysts’ expectations by 9.8%. Overall, it was a stunning quarter for the company with an impressive beat of analysts’ revenue and Investment Banking segment estimates.
Interestingly, the stock is up 3.7% since reporting and currently trades at $338.90.
Best Q3: 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 $18.22 billion, up 18.5% year on year, outperforming analysts’ expectations by 9.2%. The business had an incredible quarter with a beat of analysts’ EPS and revenue estimates.
The market seems happy with the results as the stock is up 9.1% since reporting. It currently trades at $169.51.
Is now the time to buy Morgan Stanley? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q3: Perella Weinberg (NASDAQ: PWP)
Founded in 2006 by veteran investment bankers Joseph Perella and Peter Weinberg during a wave of boutique advisory firm launches, Perella Weinberg Partners (NASDAQ: PWP) is a global independent advisory firm that provides strategic and financial advice to corporations, financial sponsors, and government institutions.
Perella Weinberg reported revenues of $164.6 million, down 40.8% year on year, falling short of analysts’ expectations by 8.4%. It was a disappointing quarter as it posted a significant miss of analysts’ revenue and EPS estimates.
Perella Weinberg delivered the weakest performance against analyst estimates and slowest revenue growth in the group. Interestingly, the stock is up 2.6% since the results and currently trades at $19.36.
Read our full analysis of Perella Weinberg’s results here.
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 $6.14 billion, up 26.6% year on year. This number beat analysts’ expectations by 2.2%. Overall, it was a strong quarter as it also produced a solid beat of analysts’ EBITDA estimates and a decent beat of analysts’ revenue estimates.
The stock is up 2.5% since reporting and currently trades at $96.72.
Read our full, actionable report on Charles Schwab here, it’s free for active Edge members.
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 $724.7 million, up 12.2% year on year. This result surpassed analysts’ expectations by 1.5%. It was a very strong quarter as it also logged a beat of analysts’ EPS estimates and a solid beat of analysts’ AUM estimates.
The stock is up 4.4% since reporting and currently trades at $51.91.
Read our full, actionable report on Lazard here, it’s free for active Edge members.
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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