The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Evercore (NYSE: EVR) and the rest of the investment banking & brokerage stocks fared in Q2.
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 Q2. As a group, revenues beat analysts’ consensus estimates by 6.7%.
In light of this news, share prices of the companies have held steady as they are up 1.7% on average since the latest earnings results.
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 print exceeded analysts’ expectations by 16.7%. Overall, it was an incredible quarter for the company with a beat of analysts’ EPS estimates and an impressive beat of analysts’ Investment Banking segment estimates.
Interestingly, the stock is up 7.9% since reporting and currently trades at $326.12.
Jefferies (NYSE: JEF)
Tracing its roots back to 1962 and rebranded from Leucadia National Corporation in 2018, Jefferies Financial Group (NYSE: JEF) is a global investment banking and capital markets firm that provides advisory services, securities trading, and asset management to corporations, institutions, and wealthy individuals.
Jefferies reported revenues of $2.05 billion, up 21.6% year on year, outperforming analysts’ expectations by 8.4%. The business had an incredible quarter with a beat of analysts’ EPS estimates and a solid beat of analysts’ Investment Banking segment estimates.
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 7.4% since reporting. It currently trades at $61.80.
Is now the time to buy Jefferies? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q2: BGC (NASDAQ: BGC)
Tracing its roots back to 1945 and named after founder Bernard Gerald Cantor, BGC Group (NASDAQ: BGC) operates a global brokerage and financial technology platform that facilitates trading across fixed income, foreign exchange, equities, energy, and commodities markets.
BGC reported revenues of $750.2 million, up 41.8% year on year, falling short of analysts’ expectations by 2.3%. It was a slower quarter as it posted a miss of analysts’ EBITDA estimates.
BGC delivered the fastest revenue growth but had the weakest performance against analyst estimates in the group. As expected, the stock is down 3.9% since the results and currently trades at $9.34.
Read our full analysis of BGC’s results here.
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 result surpassed analysts’ expectations by 9.5%. It was an incredible quarter as it also produced a beat of analysts’ EPS estimates and a solid beat of analysts’ AUM estimates.
The stock is down 8.1% since reporting and currently trades at $50.53.
Read our full, actionable report on Lazard here, it’s free for active Edge members.
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. This number beat analysts’ expectations by 17.5%. Overall, it was an incredible quarter as it also recorded a beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
Moelis pulled off the biggest analyst estimates beat among its peers. The stock is down 4.6% since reporting and currently trades at $67.54.
Read our full, actionable report on Moelis here, it’s free for active Edge members.
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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