Wrapping up Q3 earnings, we look at the numbers and key takeaways for the investment banking & brokerage stocks, including Moelis (NYSE:MC) 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 3.9% 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 3.5% on average since the latest earnings results.
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 $376 million, up 33.9% year on year. This print fell short of analysts’ expectations by 3.2%. Overall, it was a mixed quarter for the company with a beat of analysts’ EPS estimates but a significant miss of analysts’ EBITDA estimates.
Interestingly, the stock is up 6.6% since reporting and currently trades at $71.24.
Is now the time to buy Moelis? Access our full analysis of the earnings results here, it’s free for active Edge members.
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 15.6% since reporting. It currently trades at $181.55.
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. As expected, the stock is down 6.7% since the results and currently trades at $17.58.
Read our full analysis of Perella Weinberg’s results here.
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 $455.3 million, up 29.4% year on year. This print topped analysts’ expectations by 7.5%. It was a stunning quarter as it also put up a solid beat of analysts’ revenue estimates.
The stock is up 7% since reporting and currently trades at $350.15.
Read our full, actionable report on Piper Sandler here, it’s free for active Edge members.
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 $1.05 billion, up 41.6% year on year. This result surpassed analysts’ expectations by 6.9%. Overall, it was a very strong quarter as it also produced an impressive beat of analysts’ Investment Banking segment estimates and a solid beat of analysts’ EBITDA estimates.
The stock is up 10.6% since reporting and currently trades at $355.70.
Read our full, actionable report on Evercore here, it’s free for active Edge members.
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