Core Viewpoint - Morgan Stanley has raised target prices for several major banks ahead of the upcoming Q2 earnings season, indicating a positive outlook for investment banking revenues and stock trading activity [1] Group 1: Earnings Expectations - Morgan Stanley expects Goldman Sachs to report Q2 earnings per share of $10, exceeding market expectations of $9.62, driven by increased investment banking, asset management, and stock market revenues [2] - For JPMorgan Chase, Morgan Stanley anticipates Q2 earnings per share of $4.85, surpassing market expectations of $4.46, attributed to higher fee income and reduced provisions [3] Group 2: Investment Banking Activity - The investment banking business is projected to see a 20% year-over-year increase in fees for Goldman Sachs, significantly higher than the market's expectation of a 4% increase, driven by a 60% rise in merger and acquisition activity [2] - Morgan Stanley notes a 30% year-over-year increase in global announced merger activity in Q2, with North American stock capital market trading volume rising by 49% [3] Group 3: Capital Management - Following stress tests, Morgan Stanley estimates that large banks' excess capital has increased by 26%, from $156 billion to $197 billion, allowing for more flexibility in capital management [5] - The focus for investors is on how quickly banks can optimize their balance sheets and identify capital allocation opportunities, with discussions expected on capital priorities and return speeds during earnings calls [6]