Core Insights - The Q4 earnings season for major U.S. banks began positively, driven by strong quarterly results from Goldman Sachs and Morgan Stanley, alongside impressive reports from top investment management firms like BlackRock [1] Group 1: Financial Performance - Goldman Sachs reported a Q4 net income of $4.62 billion, a 12% increase year over year, with adjusted EPS of $14.01, surpassing expectations by 19% [2] - Morgan Stanley's Q4 net income reached $4.4 billion, up 19% year over year, with EPS of $2.68, exceeding estimates by 11% [3] - BlackRock's Q4 EPS increased by 10% to $13.16, beating estimates by 6%, although net income fell 32% to $1.13 billion due to higher expenses [4] Group 2: Investment Assets - BlackRock experienced inflows of $342 billion, raising its assets under management (AUM) by 21% year over year to a record $14.04 trillion [7] - Morgan Stanley reported net new assets of $122 billion, with total client assets (TCA) increasing 26% to a peak of $9.3 trillion [7] - Goldman Sachs' assets under supervision (AUS) increased by $469 billion, a 15% rise to a record $3.61 trillion [7] Group 3: Stock Performance and Valuation - Goldman Sachs and Morgan Stanley stocks have outperformed the broader market, rising 53% and 39% respectively over the last year, while BlackRock shares increased by 17% but are down 4% from their all-time high [8] - Goldman and Morgan Stanley stocks are trading at under 19X forward earnings, offering a discount compared to BlackRock's 21X [9] - Morgan Stanley has a dividend yield of 2.09%, higher than BlackRock's 1.8% and Goldman's 1.64% [13] Group 4: Conclusion and Outlook - Morgan Stanley is currently favored due to its attractive stock price under $200 and better performance metrics compared to Goldman Sachs and BlackRock, which trade over $900 per share [15] - EPS revisions for FY26 and FY27 have been more favorable for Morgan Stanley, which holds a Zacks Rank 2 (Buy), while Goldman and BlackRock are at Zacks Rank 3 (Hold) [15]