Invest in 5 Investment Bank Stocks to Enrich Your Portfolio in 2025

Industry Overview - The investment bank industry has experienced significant growth in 2024 due to a rebound in corporate debt and equity issuances, as well as increased deal-making activities, which are expected to boost investment banking fees in 2025 [1] - Despite sustained weakness in underwriting, IPOs, and deal-making activities since 2022, there are signs of recovery in advisory and underwriting businesses, with a healthy deal pipeline [2] - The Zacks-defined Financial – Investment Bank Industry ranks in the top 18% of Zacks Industry Rank, with a 54% return over the past year and a year-to-date return of 43.1% [7] Positive Catalysts - The macroeconomic environment is stabilizing due to a global interest rate-cutting cycle, leading to optimism for a soft landing of the U.S. economy, which is expected to support a sustained recovery in underwriting and M&A activities [4] - Innovations in trading platforms, the use of artificial intelligence, and investments in technology and advertising are anticipated to enhance the operations of investment banks, improving operating efficiency over time despite rising technology-related expenses [5] Company Recommendations - Five investment bank stocks are recommended for purchase based on favorable Zacks Rank: Goldman Sachs Group Inc. (GS), Morgan Stanley (MS), Bank of America Corp. (BAC), Wells Fargo & Co. (WFC), and Raymond James Financial Inc. (RJF) [3][8] Company Performance Highlights - Goldman Sachs Group Inc. (GS): Expected revenue growth of 7.5% and earnings growth of 14.8% for next year, with a Zacks Consensus Estimate for next-year earnings improving by 2.7% [12][11] - Morgan Stanley (MS): Projected IB fees to increase by 31% in 2024, with expected revenue growth of 4.8% and earnings growth of 7.7% for next year [13][14] - Bank of America Corp. (BAC): Anticipated total revenue growth of 3.2% in 2024, with expected revenue growth of 4.4% and earnings growth of 11.5% for next year [16][17] - Wells Fargo & Co. (WFC): Expected revenue growth of 1.2% and earnings growth of 3.9% for next year, benefiting from higher non-interest income and cost reduction initiatives [18][19] - Raymond James Financial Inc. (RJF): Expected IB fees to rise by 23.4% in fiscal 2025, with revenue growth of 10% and earnings growth of 7.8% for the current year [21][22]