Let’s dig into the relative performance of Lazard (NYSE:LAZ) and its peers as we unravel the now-completed Q3 investment banking & brokerage earnings season.
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.
While some investment banking & brokerage stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 4% since the latest earnings results.
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 print exceeded analysts’ expectations by 1.5%. Overall, it was a very strong quarter for the company with a beat of analysts’ EPS and AUM estimates.
Unsurprisingly, the stock is down 1.9% since reporting and currently trades at $48.81.
Is now the time to buy Lazard? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q3: PJT (NYSE:PJT)
Spun off from Blackstone in 2015 and founded by former Morgan Stanley executive Paul J. Taubman, PJT Partners (NYSE:PJT) is an advisory-focused investment bank that provides strategic advice, restructuring services, and fundraising solutions to corporations, boards, and investment firms.
PJT reported revenues of $447.1 million, up 37% year on year, outperforming analysts’ expectations by 15.6%. The business had an incredible quarter with a beat of analysts’ EPS and revenue estimates.
PJT achieved the biggest analyst estimates beat among its peers. The market seems content with the results as the stock is up 1.6% since reporting. It currently trades at $165.05.
Is now the time to buy PJT? 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 6.9% since the results and currently trades at $17.55.
Read our full analysis of Perella Weinberg’s results here.
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. This number came in 4.5% below analysts' expectations. It was a slower quarter as it also logged a significant miss of analysts’ EBITDA and revenue estimates.
The stock is down 6.5% since reporting and currently trades at $8.53.
Read our full, actionable report on BGC here, it’s free for active Edge members.
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 result surpassed analysts’ expectations by 2.2%. It was a strong quarter as it also produced an impressive beat of analysts’ EBITDA estimates and a decent beat of analysts’ revenue estimates.
The stock is down 4.2% since reporting and currently trades at $90.36.
Read our full, actionable report on Charles Schwab here, it’s free for active Edge members.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
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