Financial Performance & Growth - Jefferies' net revenues have grown significantly, reaching $72 billion LTM Q3'25, an 86% increase compared to $39 billion in 2019[38] - The firm's ROTE (Return on Tangible Equity) to all shareholders from continuing operations has improved to 103% LTM Q3'25, a 440 bps increase from 59% in 2019[38] - Asset Management total fees increased +456% from $2 million in 2019 to $139 million LTM Q3'25[145] Investment Banking - Investment Banking net revenues reached $36 billion LTM Q3'25, marking the 2nd highest in the firm's history[19] - Advisory revenues hit a record $21 billion LTM Q3'25[19] - Jefferies' global investment banking market share increased to 41% in Q3'25 Ann, a 30 bps increase from 38% in 2024[22] - The firm's 2025 fee wallet increased by 11%, driven by corporate activity, while sponsor activity is yet to return to growth[65] Equities - Equities net revenues achieved a record high, with LTM Q3'25 revenues reaching $1833 million, a 137% increase compared to 2019[81] - International revenue now represents 42% of global revenue, up from 34% in 2019[94] - Global equities cash market share reached a record 5% in Q2'25[19] Strategic Partnerships - SMBC will increase equity ownership in Jefferies from 145% to up to 20% in the open market[29] - Jefferies and SMBC's alliance has led to a >4x increase in Jefferies' M&A and ECM market share for joint sponsor clients since launch in 2024[30]

Core Insights - The global investment banking (IB) market is projected to grow from $170 billion in 2023 to $394.2 billion by 2033, with a CAGR of 8.8% [2] - JPMorgan and Morgan Stanley are both positioned to benefit from this growth, but their near-term prospects are affected by market volatility and economic uncertainty [3][6] JPMorgan Overview - JPMorgan ranks 1 for global IB fees, with total IB fees increasing by 37% to $8.91 billion in 2024 after a decline in previous years [4] - In Q1 2025, JPMorgan's IB fees grew 12% year-over-year to $2.18 billion, driven by advisory fees and debt underwriting income [5] - The long-term outlook for JPMorgan's IB business remains strong, with estimated IB fees expected to grow at a CAGR of 2.8% by 2027 [6] - The bank's revenue is significantly supported by net interest income, which accounts for nearly 50% of total revenues [7] Morgan Stanley Overview - Morgan Stanley's IB revenues surged 36% to $6.71 billion in the previous year, following declines in earlier years [8] - The first-quarter 2025 IB revenues grew 8% year-over-year, attributed to higher advisory and debt underwriting income [9] - Morgan Stanley maintains a stable M&A pipeline and projects IB fees to grow at a CAGR of 5% by 2027 [11] - The company has diversified into wealth and asset management, which contributed to over 55% of total net revenues in 2024 [11] Price Performance and Valuation - Year-to-date, JPMorgan shares have gained 11.6%, while Morgan Stanley shares have increased by 5.4% [12] - JPMorgan is trading at a forward P/E of 14.36X, while Morgan Stanley's forward P/E is 15.00X, both above the industry average of 13.75X [16][18] - JPMorgan's dividend yield is 2.09%, lower than Morgan Stanley's 2.79%, but both exceed the S&P 500 average of 1.54% [18] Return on Equity and Estimates - JPMorgan's return on equity (ROE) stands at 16.88%, higher than Morgan Stanley's 14.98% [20] - For 2025, JPMorgan's revenue is expected to decline by 1.5%, while Morgan Stanley's revenue is projected to increase by 5.4% [21][22] Investment Considerations - JPMorgan offers stability, strong ROE, and a lower valuation multiple, making it suitable for risk-averse investors [26] - Morgan Stanley presents stronger growth potential with higher projected revenue and earnings growth, appealing to growth-oriented investors [27]