We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
JPM or MS: Which IB Stock to Buy Amid Optimistic Industry Prospects?
Read MoreHide Full Article
Key Takeaways
JPMorgan's IB fees jumped 36% in 2024, with continued gains expected as deal-making rebounds.
Morgan Stanley's 2024 IB revenues also rose 36%.
JPM offers stability and lower valuation, while MS shows stronger earnings and revenue growth prospects.
When it comes to Wall Street heavyweights, few names wield more influence than JPMorgan (JPM - Free Report) and Morgan Stanley (MS - Free Report) . These financial powerhouses stand as cornerstones of global finance, boasting deep expertise in investment banking, from advising on multibillion-dollar mergers and underwriting marquee IPOs to steering clients through the intricacies of global capital markets.
After a prolonged slump in underwriting, IPOs and deal-making since 2022 due to global uncertainty, IB activity has rebounded. Optimism grew early this year amid expectations of tax cuts and deregulation under a pro-business Trump administration. However, renewed tariff concerns and trade war fears in April briefly dampened sentiment. Since then, clearer trade policies and the Federal Reserve’s rate cuts have improved conditions. The evolving macro backdrop now supports a more stable environment, setting the stage for sustained top-line growth across the industry.
Hence, which IB powerhouse – JPMorgan or Morgan Stanley – is a smarter bet now on bullish industry prospects? Let’s decipher this.
The Case for JPMorgan
JPMorgan, while more diversified across banking and lending, remains a dominant force in the IB business, ranking #1 for global IB fees. In 2024, the company’s total IB fees soared 36% after declining in 2023 and 2022.
While JPMorgan was not untouched by the slump in the IB business earlier this year, its leadership position offered support. The uptrend in IB fees continued in the first six months of 2025, with the company garnering a wallet share of 8.9%.
Global deal-making activities are showing signs of impressive performance in the upcoming quarters, given the clarity on several macro issues and stronger corporate appetite for consolidation. Hence, JPMorgan is well-placed to benefit from this. Management expects third-quarter 2025 IB fees in the Commercial & Investment Bank segment to grow in the low double-digit range year over year on the back of solid pipelines.
Apart from the IB business, JPM (the largest bank in the United States) has a presence across all sectors of the financial services. The company’s major portion of revenues comes from net interest income or NII (accounting for almost 50% of total revenues). As the Fed continues to lower interest rates, the company’s NII is likely to face growth pressure into 2026. For this year, the company expects the metric to be roughly $95.5 billion (up more than 3% year over year).
The Case for Morgan Stanley
Morgan Stanley has leaned heavily into the IB business, although it has been diversifying into more stable revenue-generating sources like asset and wealth management businesses, creating a more balanced revenue stream across market cycles. Similar to JPM, the company’s IB revenues surged 36% in 2024 after plunging in the two years before that.
However, the company’s IB performance slumped in the first half of 2025 as tariff-related ambiguity hurt industry-wide deal-making activities. MS remains cautiously optimistic about the performance of the IB business this year, supported by a stable and diversified M&A pipeline. Hence, given the improving macroeconomic scenario, the company will be able to capitalize on it.
Also, Morgan Stanley’s partnership with Mitsubishi UFJ Financial Group, Inc. will continue to support profitability. With further solidification of this collaboration in 2023, the company’s market share in Japan has improved. The company’s Asia region revenues jumped 28% year over year to $4.65 billion during the first half of 2025.
As mentioned above, MS is focusing on expanding its wealth and asset management operations, which supported its financials during the post-pandemic slowdown in the IB business. Both businesses’ aggregate contribution to total net revenues jumped to more than 55% in 2024 from 26% in 2010. The momentum continued in the first six months of 2025, with total client assets across both segments reaching $8.2 trillion. This brings the company closer to its longstanding goal of $10 trillion in asset management set by former CEO James Gorman.
JPM & MS: Price Performance, Valuation & Other Comparisons
This year, shares of JPMorgan and Morgan Stanley gained 28.4% and 24.1%, respectively.
JPM & MS YTD Price Performance
Image Source: Zacks Investment Research
JPM has outpaced the Zacks Investment Bank industry and the S&P 500 Index. On the other hand, MS has outperformed the broader index while lagging the industry. Hence, in terms of investor sentiments, JPMorgan clearly has the edge.
In terms of valuation, JPMorgan is currently trading at a 12-month forward price-to-earnings (P/E) of 15.05X. The MS stock, on the other hand, is currently trading at a 12-month forward P/E of 16.57X.
P/E F12M
Image Source: Zacks Investment Research
Further, JPM and Morgan Stanley are trading at a premium compared with the industry average of 14.69X. So, JPMorgan is inexpensive compared to Morgan Stanley.
JPM’s dividend yield of 1.82% is lower than Morgan Stanley’s 2.57%. Nonetheless, both are higher than the S&P 500 average dividend yield of 1.09%.
Dividend Yield
Image Source: Zacks Investment Research
Further, JPMorgan’s return on equity (ROE) of 16.93% is above Morgan Stanley’s 15.2%. Also, both outscore the industry’s ROE of 12.06%. This reflects JPM’s efficient use of shareholder funds to generate profits.
ROE
Image Source: Zacks Investment Research
How Do Estimates Compare for JPM & MS?
The Zacks Consensus Estimate for JPM’s 2025 revenues implies a marginal year-over-year rise, while for 2026, the metric is expected to grow 3.7%. Likewise, the consensus estimate for 2025 earnings indicates slight growth, while the same is anticipated to rise 4.5% for 2026. Earnings estimates for both years have moved north over the past week.
Estimate Revision
Image Source: Zacks Investment Research
On the contrary, analysts are more bullish on Morgan Stanley’s prospects. The consensus mark for 2025 and 2026 revenues suggests a year-over-year jump of 8.6% and 4.4%, respectively. Also, the consensus estimate for earnings suggests an 11.7% and 8.6% increase for 2025 and 2026, respectively. Earnings estimates for both years have been revised upward over the past seven days.
Estimate Revision
Image Source: Zacks Investment Research
JPMorgan or Morgan Stanley: Which IB Stock is a Smarter Bet?
JPMorgan combines stability and leadership in investment banking with diversified revenue streams, strong returns on equity and solid share performance. Its balanced outlook and lower valuation multiple compared with MS make it an appealing choice for risk-averse investors seeking consistency and resilience in an uncertain market.
By contrast, Morgan Stanley offers greater upside potential, driven by stronger projected revenue and earnings growth, a robust deal pipeline and continued expansion in wealth and asset management. Despite its higher valuation, its strategic diversification and superior dividend yield position make it an attractive pick for long-term, growth-oriented investors.
Image: Bigstock
JPM or MS: Which IB Stock to Buy Amid Optimistic Industry Prospects?
Key Takeaways
When it comes to Wall Street heavyweights, few names wield more influence than JPMorgan (JPM - Free Report) and Morgan Stanley (MS - Free Report) . These financial powerhouses stand as cornerstones of global finance, boasting deep expertise in investment banking, from advising on multibillion-dollar mergers and underwriting marquee IPOs to steering clients through the intricacies of global capital markets.
After a prolonged slump in underwriting, IPOs and deal-making since 2022 due to global uncertainty, IB activity has rebounded. Optimism grew early this year amid expectations of tax cuts and deregulation under a pro-business Trump administration. However, renewed tariff concerns and trade war fears in April briefly dampened sentiment. Since then, clearer trade policies and the Federal Reserve’s rate cuts have improved conditions. The evolving macro backdrop now supports a more stable environment, setting the stage for sustained top-line growth across the industry.
Hence, which IB powerhouse – JPMorgan or Morgan Stanley – is a smarter bet now on bullish industry prospects? Let’s decipher this.
The Case for JPMorgan
JPMorgan, while more diversified across banking and lending, remains a dominant force in the IB business, ranking #1 for global IB fees. In 2024, the company’s total IB fees soared 36% after declining in 2023 and 2022.
While JPMorgan was not untouched by the slump in the IB business earlier this year, its leadership position offered support. The uptrend in IB fees continued in the first six months of 2025, with the company garnering a wallet share of 8.9%.
Global deal-making activities are showing signs of impressive performance in the upcoming quarters, given the clarity on several macro issues and stronger corporate appetite for consolidation. Hence, JPMorgan is well-placed to benefit from this. Management expects third-quarter 2025 IB fees in the Commercial & Investment Bank segment to grow in the low double-digit range year over year on the back of solid pipelines.
Apart from the IB business, JPM (the largest bank in the United States) has a presence across all sectors of the financial services. The company’s major portion of revenues comes from net interest income or NII (accounting for almost 50% of total revenues). As the Fed continues to lower interest rates, the company’s NII is likely to face growth pressure into 2026. For this year, the company expects the metric to be roughly $95.5 billion (up more than 3% year over year).
The Case for Morgan Stanley
Morgan Stanley has leaned heavily into the IB business, although it has been diversifying into more stable revenue-generating sources like asset and wealth management businesses, creating a more balanced revenue stream across market cycles. Similar to JPM, the company’s IB revenues surged 36% in 2024 after plunging in the two years before that.
However, the company’s IB performance slumped in the first half of 2025 as tariff-related ambiguity hurt industry-wide deal-making activities. MS remains cautiously optimistic about the performance of the IB business this year, supported by a stable and diversified M&A pipeline. Hence, given the improving macroeconomic scenario, the company will be able to capitalize on it.
Also, Morgan Stanley’s partnership with Mitsubishi UFJ Financial Group, Inc. will continue to support profitability. With further solidification of this collaboration in 2023, the company’s market share in Japan has improved. The company’s Asia region revenues jumped 28% year over year to $4.65 billion during the first half of 2025.
As mentioned above, MS is focusing on expanding its wealth and asset management operations, which supported its financials during the post-pandemic slowdown in the IB business. Both businesses’ aggregate contribution to total net revenues jumped to more than 55% in 2024 from 26% in 2010. The momentum continued in the first six months of 2025, with total client assets across both segments reaching $8.2 trillion. This brings the company closer to its longstanding goal of $10 trillion in asset management set by former CEO James Gorman.
JPM & MS: Price Performance, Valuation & Other Comparisons
This year, shares of JPMorgan and Morgan Stanley gained 28.4% and 24.1%, respectively.
JPM & MS YTD Price Performance
Image Source: Zacks Investment Research
JPM has outpaced the Zacks Investment Bank industry and the S&P 500 Index. On the other hand, MS has outperformed the broader index while lagging the industry. Hence, in terms of investor sentiments, JPMorgan clearly has the edge.
In terms of valuation, JPMorgan is currently trading at a 12-month forward price-to-earnings (P/E) of 15.05X. The MS stock, on the other hand, is currently trading at a 12-month forward P/E of 16.57X.
P/E F12M
Image Source: Zacks Investment Research
Further, JPM and Morgan Stanley are trading at a premium compared with the industry average of 14.69X. So, JPMorgan is inexpensive compared to Morgan Stanley.
JPM’s dividend yield of 1.82% is lower than Morgan Stanley’s 2.57%. Nonetheless, both are higher than the S&P 500 average dividend yield of 1.09%.
Dividend Yield
Image Source: Zacks Investment Research
Further, JPMorgan’s return on equity (ROE) of 16.93% is above Morgan Stanley’s 15.2%. Also, both outscore the industry’s ROE of 12.06%. This reflects JPM’s efficient use of shareholder funds to generate profits.
ROE
Image Source: Zacks Investment Research
How Do Estimates Compare for JPM & MS?
The Zacks Consensus Estimate for JPM’s 2025 revenues implies a marginal year-over-year rise, while for 2026, the metric is expected to grow 3.7%. Likewise, the consensus estimate for 2025 earnings indicates slight growth, while the same is anticipated to rise 4.5% for 2026. Earnings estimates for both years have moved north over the past week.
Estimate Revision
Image Source: Zacks Investment Research
On the contrary, analysts are more bullish on Morgan Stanley’s prospects. The consensus mark for 2025 and 2026 revenues suggests a year-over-year jump of 8.6% and 4.4%, respectively. Also, the consensus estimate for earnings suggests an 11.7% and 8.6% increase for 2025 and 2026, respectively. Earnings estimates for both years have been revised upward over the past seven days.
Estimate Revision
Image Source: Zacks Investment Research
JPMorgan or Morgan Stanley: Which IB Stock is a Smarter Bet?
JPMorgan combines stability and leadership in investment banking with diversified revenue streams, strong returns on equity and solid share performance. Its balanced outlook and lower valuation multiple compared with MS make it an appealing choice for risk-averse investors seeking consistency and resilience in an uncertain market.
By contrast, Morgan Stanley offers greater upside potential, driven by stronger projected revenue and earnings growth, a robust deal pipeline and continued expansion in wealth and asset management. Despite its higher valuation, its strategic diversification and superior dividend yield position make it an attractive pick for long-term, growth-oriented investors.
At present, JPMorgan and Morgan Stanley carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.