Key Takeaways Citigroup projects mid-20% y/y growth in 4Q25 investment banking fees, driven by deal-making momentum. Management cited mega deals and investment-grade activity as key contributors to IB fee growth. Markets revenues are expected to fall y/y in the low to mid-single digits despite investment banking strength.At the 2025 Goldman Sachs U.S. Financial Services Conference, Citigroup, Inc.’s (C) chief financial officer Mark Mason stated that the company’s investment banking (IB) fees are expected to ...

Core Insights - The Federal Reserve has implemented its third consecutive 25-basis-point rate cut this year, which is expected to support a resurgence in deal-making activity and potentially boost investment banking fees for Morgan Stanley [1][4]. Investment Banking Activity - Morgan Stanley's investment banking (IB) revenues reached $5.2 billion in the first nine months of 2025, reflecting a 15% year-over-year increase, driven by a wave of deal-making and initial public offerings [3][10]. - The improving environment is supporting strategic mergers and acquisitions (M&As) and renewed financing activity, with CEO Ted Pick indicating that IB activity is likely to continue rising over the next couple of years [3][10]. Market Conditions - The Fed's latest rate cut is anticipated to lower financing costs, encouraging companies to revive delayed M&A and capital-raising plans, which typically boosts deal pipelines and IPO readiness [4]. - A healthy IB pipeline and an active M&A market position Morgan Stanley to capitalize on the improving macroeconomic backdrop, although the benefits may be frontloaded due to the Fed signaling a pause in further rate cuts [5]. Peer Performance - Other major investment banking firms like JPMorgan and Goldman Sachs are also expected to benefit from the macro tailwind of lower borrowing costs, with JPMorgan's IB fees rising to $7.3 billion (12.3% year-over-year growth) and Goldman's IB fee revenues totaling $6.8 billion (19.1% year-over-year growth) in the first nine months of 2025 [6][7][8]. Stock Performance - Morgan Stanley's shares have gained 43.4% this year, outperforming the industry's growth of 35.4% [9].

Core Insights - Bank of America (BAC) reported third-quarter 2025 EPS of $1.06, exceeding consensus estimates of $0.95, and core EPS of $1.06 compared to Street estimates of $0.97–$1.00 [1][4] - The bank raised its fourth-quarter 2025 net interest income (NII) guidance to $15.6–15.7 billion, indicating strong growth in NII and improved trading and investment banking fees [1][2] - Analyst Richard Ramsden maintained a Buy rating on BAC with a price target of $59, projecting fiscal 2025 revenue of $109.43 billion and EPS of $3.71 [2] Financial Performance - BAC's core Pre-Provision Net Revenue (PPNR) was $10.9 billion, 6% above Street expectations, driven by stronger core fees and improved operating efficiency [4] - The bank's NII exceeded expectations by 1%, supported by a 3-basis-point increase in net interest margin (NIM) [4] - Core fee revenue rose 4% above expectations, bolstered by stronger trading and investment banking fees, although consumer fees lagged slightly [4] Capital and Efficiency - Despite $5.3 billion in share repurchases, BAC grew its Common Equity Tier 1 (CET1) by $1.7 billion, with a CET1 ratio of 11.6%, significantly above the 10% minimum [2][4] - The core efficiency ratio improved to 61.4%, about 140 basis points better than the Street [4] - Provisions fell 18% below estimates due to a $72 million reserve release [4] Market Reaction - BAC stock increased by 4.35% to $52.28 following the earnings report [3]

Core Insights - Comerica Incorporated (CMA) has revised its second-quarter 2025 outlook for loans and deposits, indicating a decline in average deposits and an increase in average loans compared to previous guidance [1][3][7] Group 1: Deposit Trends - Average deposits for the quarter to date through May 31, 2025, have decreased by $0.6 billion compared to the first quarter, with significant declines noted in middle market, retail, and corporate banking [1][2][7] - The bank's previous guidance anticipated average deposits to remain flat from the first quarter's $61.9 billion, but current trends suggest downward pressure on this outlook [2][7] Group 2: Loan Performance - Average loans for the quarter to date have increased by $200 million from the previous quarter, driven by growth in corporate and private banking, although this was partially offset by declines in equity fund services and national dealer services [3][7] - Comerica now expects average loan balances to outperform earlier guidance, which had projected a slight decline from the first quarter's $50.2 billion [3][7] Group 3: Income and Expenses - Net interest income (NII) for the second quarter is projected to be relatively flat at $575 million, with a 5-7% increase anticipated for 2025 compared to 2024 [4] - Non-interest income is expected to show stronger growth from the first quarter's $254 million, with a projected 2% year-over-year increase for 2025 [4] - Non-interest expenses are anticipated to be slightly higher than the previous quarter's $584 million, with a 2-3% rise expected for 2025 compared to 2024 [5] Group 4: Market Performance - CMA shares have declined by 7% year-to-date, contrasting with a 2.7% decline in the industry [6]

Core Insights - Bank of America (BAC) CEO Brian Moynihan highlighted anticipated weakness in investment banking (IB) fees for Q2, while trading revenues are expected to show strength [1][9]. Investment Banking Fees - BAC expects IB fees to decline over 20% year-over-year in Q2 due to tariff-related challenges affecting deal-making sentiment [2][9]. - In Q1, BAC reported IB fees of $1.52 billion, a 3% decline, primarily due to a drop in equity underwriting income, although higher advisory and debt underwriting revenues provided some offset [2]. Trading Revenues - BAC projects trading revenues to grow in the mid-to-high single-digit range for Q2, marking the 13th consecutive quarter of year-over-year growth [3][9]. - Last quarter, BAC's sales and trading revenues reached $5.65 billion, the highest in a decade, with a consensus estimate of $5.11 billion for Q2, indicating a 9% year-over-year growth [3][4]. Non-Interest Income - Sales and trading account for approximately 43% of BAC's fee income, which is expected to help mitigate the pressure from declining IB fees, leading to a projected 2% increase in non-interest income to $11.87 billion [4][9]. Peer Comparisons - JPMorgan (JPM) anticipates mid-to-high single-digit growth in market revenues for Q2, while expecting IB fees to decline in the mid-teens range [5]. - Citigroup (C) expects a mid-single-digit increase in IB fees due to a rebound in deal-making activities, alongside similar growth projections for trading revenues [6]. Stock Performance - BAC shares have increased by 12.8% over the past three months, compared to JPMorgan's 19.1% and Citigroup's 16.6% increases [7]. Valuation and Earnings Estimates - BAC trades at a 12-month trailing price-to-tangible book (P/TB) ratio of 1.69X, which is below the industry average [10]. - The Zacks Consensus Estimate indicates year-over-year earnings growth of 12.2% for 2025 and 15.3% for 2026, with slight upward revisions for 2025 estimates and minor downward adjustments for 2026 [12].

Group 1: Company Performance - JPMorgan remains a top player in investment banking, ranking 1 in global IB fees, with total IB fees soaring 37% to $8.91 billion in 2024 after declines in 2023 and 2022 [1] - In Q1 2025, JPMorgan's IB fees grew 12% year over year to $2.18 billion, driven by strong advisory and debt underwriting activity [1][9] - Morgan Stanley's IB revenues rebounded 36% in 2024 to $6.71 billion and rose another 8% in Q1 2025, indicating a recovery in the sector [5] - Goldman Sachs continues to dominate the IB business, maintaining a top position in announced and completed M&As, despite an 8% year-over-year fall in IB revenues in Q1 2025 [6] Group 2: Market Outlook - Near-term IB prospects for JPMorgan are clouded by market turmoil and monetary policy ambiguity, with a cautious stance adopted on the investment banking outlook [2] - Economic uncertainty is expected to hurt JPMorgan's IB business in Q2 2024, with IB fees projected to decline in the mid-teens range year over year [2] - Despite challenges, JPMorgan's long-term outlook for the IB business remains strong, supported by a healthy IB pipeline and an active M&A market, with an estimated CAGR of 2.2% for IB fees by 2027 [3] Group 3: Valuation and Earnings Estimates - JPMorgan shares have risen 10.8% this year, outperforming Morgan Stanley and Goldman Sachs [7] - The Zacks Consensus Estimate for JPMorgan's 2025 earnings implies a decline of 7% year over year, with a rebound of 5.2% expected in 2026 [9][13] - JPMorgan currently trades at a 12-month trailing price-to-tangible book (P/TB) of 2.81X, slightly below the industry average [10]