As the Q3 earnings season wraps, let’s dig into this quarter’s best and worst performers in the investment banking & brokerage industry, including Perella Weinberg (NASDAQ: PWP) 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.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 5.2% since the latest earnings results.

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. This print fell short of analysts’ expectations by 8.4%. Overall, it was a disappointing quarter for the company with a significant miss of analysts’ revenue estimates and a significant miss of analysts’ EPS estimates.

“Our strategic investments this year — adding 25 senior bankers and closing the Devon Park acquisition — position us well in an increasingly active transaction environment and demonstrate our commitment to build scale. We’ve hired in some of the most attractive sectors in our markets, with a singular focus on providing the best strategic and financial advice to our clients,” stated Andrew Bednar, Chief Executive Officer.

Perella Weinberg delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. Unsurprisingly, the stock is down 7.2% since reporting and currently trades at $17.50.

Read our full report on Perella Weinberg 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 content with the results as the stock is up 1.5% since reporting. It currently trades at $159.35.

Is now the time to buy Morgan Stanley? Access our full analysis of the earnings results here, it’s free for active Edge members.

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 $703 million, up 31.2% year on year, falling short of analysts’ expectations by 4.5%. It was a slower quarter as it posted a significant miss of analysts’ EBITDA and revenue estimates.

As expected, the stock is down 4.3% since the results and currently trades at $8.73.

Read our full analysis of BGC’s results here.

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 came in 3.2% below analysts' expectations. Zooming out, it was a mixed quarter as it also recorded a beat of analysts’ EPS estimates but a significant miss of analysts’ EBITDA estimates.

The stock is down 11.1% since reporting and currently trades at $59.41.

Read our full, actionable report on Moelis here, it’s free for active Edge members.

Goldman Sachs (NYSE: GS)

Founded in 1869 as a small commercial paper business in New York City, Goldman Sachs (NYSE: GS) is a global financial institution that provides investment banking, securities, asset management, and consumer banking services to corporations, governments, and individuals.

Goldman Sachs reported revenues of $15.18 billion, up 19.6% year on year. This result surpassed analysts’ expectations by 6.8%. It was a stunning quarter as it also produced an impressive beat of analysts’ Banking & Markets segment estimates and a solid beat of analysts’ Asset & Wealth Management segment estimates.

The stock is down 1.1% since reporting and currently trades at $778.21.

Read our full, actionable report on Goldman Sachs here, it’s free for active Edge members.

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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