Goldman Sachs and Morgan Stanley had a monster quarter. Analysts say these giants could be next.
Robust first-half earnings from Morgan Stanley and Goldman Sachs last week have triggered earnings and recommendation upgrades from research analysts as they say Wall Street’s success may be shared in Europe as well.
The strong quarterly performances from Goldman Sachs and Morgan Stanley have caught the attention of research analysts, who are now expecting similar success from their European counterparts. This is significant because it suggests that the positive trends driving the earnings of these US banking giants may be replicable across the Atlantic.
A key factor behind the earnings upgrades is the robust performance of the investment banking and trading divisions of both Goldman Sachs and Morgan Stanley. This has led analysts to reassess their expectations for European banks, which have historically trailed their US peers in terms of profitability. If European banks can match the success of their US counterparts, it could signal a broader industry-wide recovery.
To watch next: the upcoming earnings announcements from major European banks, which will provide a clearer picture of whether they can indeed replicate the success of Goldman Sachs and Morgan Stanley. Investors will be closely monitoring these releases for signs of improvement in trading and investment banking revenues, as well as any guidance on future prospects.
Originally reported by marketwatch.com. FundNews adds analysis for finance & markets readers.