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4 Thriving Investment Bank Behemoths to Buy With Attractive Valuation
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Key Takeaways
JPM, GS, C and MS are highlighted as investment bank giants with favorable valuations and strong gains.
The industry has rallied in 2026 as client activity, underwriting, advisory and trading businesses rebounded.
AI is boosting long-term efficiency as investment banks expand fee income and diversify revenue streams.
The investment bank industry is on a rally this year backed by increased client activity, a rebound in underwriting and advisory businesses, a solid trading business and the massive application of artificial intelligence (AI) boosting long-term efficiency. This trend is likely to continue for the rest of this year.
The Zacks-defined Financial – Investment Bank industry is currently in the top 16% of the Zacks Industry Rank. In the past year, the industry has provided 26.7% returns, while its year-to-date return is 12.8%. Since it is ranked in the top half of the Zacks Ranked Industries, we expect the Investment Bank industry to outperform the market over the next three to six months.
At this stage, we recommend buying shares of four investment bank giants with a favorable Zacks Rank. These stocks have rallied more than 20% in the past six months, yet they are currently trading at attractive valuations.
The chart below shows the price performance of our four picks in the past six months.
Image Source: Zacks Investment Research
JPMorgan Chase & Co.
Zacks Rank #2 JPMorgan Chase remains well-positioned given the current operating backdrop. JPM has been witnessing solid gains in capital markets and investment banking (IB). JPM continues to expand its physical and digital distribution network, which supports primary banking relationships, cross-selling opportunities in cards and auto loans, and long-term deposit share gains.
JPM’s consumer franchise keeps widening, with U.S. branch builds and Chase digital growth in Europe, while scale, diversified revenues and disciplined balance sheet management aid durable earnings. JPM’s higher-for-longer rate regime will aid net interest income (NII), and solid markets activity, IB fees and asset management flows will drive fee income.
Strong Estimate Revisions
JPMorgan Chase has an expected revenue and earnings growth rate of 13.3% and 22.6%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 0.1% in the last 60 days.
JPM has an expected revenue and earnings growth rate of 55.8% and 58.7%, respectively, for the next year. The Zacks Consensus Estimate for the next year’s earnings has improved 9.3% in the last 60 days.
Image Source: Zacks Investment Research
Attractive Valuation
The stock has a forward P/E of 14.38X, compared with the industry’s P/E of 14.94X and the S&P 500’s P/E of 18.52X. It has a P/S of 3.20X, compared with the industry’s P/S of 2.26X and the S&P 500’s P/S of 3.09X. JPM has a P/B of 2.70X, compared with the industry’s P/B of 2.74X and the S&P 500’s P/B of 3.71X.
The Goldman Sachs Group Inc.
Zacks Rank #1 Goldman Sachs has been benefiting from strong revenue growth in Global Banking & Markets and Asset & Wealth Management. GS’ strong capital and liquidity position aids shareholder returns, including an 11% dividend hike post-clearing 2026 Fed stress test.
GS is prioritizing durable revenue streams, with improving deal activity and a strong investment banking backlog supporting advisory and fee-income growth. GS’ private credit expansion is expected to diversify revenue and drive long-term growth.
Strong Estimate Revisions
Goldman Sachs has an expected revenue and earnings growth rate of 21.1% and 34.2%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 13.5% in the last 60 days.
GS has an expected revenue and earnings growth rate of 1.6% and 4.9%, respectively, for the next year. The Zacks Consensus Estimate for the next year’s earnings has improved 7.3% in the last 60 days.
Image Source: Zacks Investment Research
Attractive Valuation
The stock has a forward P/E of 15.08X, compared with the industry’s P/E of 14.94X and the S&P 500’s P/E of 18.52X. It has a P/S of 2.24X, compared with the industry’s P/S of 2.26X and the S&P 500’s P/S of 3.09X. GS has a P/B of 2.76X, compared with the industry’s P/B of 2.74X and the S&P 500’s P/B of 3.71X.
Citigroup Inc.
Zacks Rank #2 Citigroup’s simplified operating structure is reducing complexity, improving efficiency, and allowing capital to be redirected toward higher-return businesses. C’s expanding private-market capabilities will likely drive fee income growth, while strong liquidity profile and improving efficiency support capital returns.
Citigroup expects NII (excluding Markets) to increase 5-6% on a year-over-year basis in 2026. Management anticipates an efficiency ratio of 60% in 2026, with another year of positive operating leverage.
Strong Estimate Revisions
Citigroup has an expected revenue and earnings growth rate of 12.1% and 40.7%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 0.1% in the last 30 days.
C has an expected revenue and earnings growth rate of 4.3% and 15.5%, respectively, for the next year. The Zacks Consensus Estimate for the next year’s earnings has improved 2.9% in the last 60 days.
Image Source: Zacks Investment Research
Attractive Valuation
The stock has a forward P/E of 12.29X, compared with the industry’s P/E of 14.94X and the S&P 500’s P/E of 18.52X. It has a P/S of 1.35X, compared with the industry’s P/S of 2.26X and the S&P 500’s P/S of 3.09X. C has a P/B of 1.21X, compared with the industry’s P/B of 2.74X and the S&P 500’s P/B of 3.71X.
Morgan Stanley
Zacks Rank #2 Morgan Stanley benefits from a durable wealth and asset management franchise that supports steadier fee income and deep client relationships, with strategic alliances adding to long-term growth.
MS’ IB business will benefit from a healthier deal environment, supported by a robust and diversified pipeline. MS’ alliance with Mitsubishi UFJ Financial Group continues to enhance its competitive position in Japan through combined research, sales and execution and coordinated underwriting.
Strong Estimate Revisions
Morgan Stanley has an expected revenue and earnings growth rate of 15.9% and 25.4%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 0.1% in the last seven days.
MS has an expected revenue and earnings growth rate of 3.6% and 2.2%, respectively, for the next year. The Zacks Consensus Estimate for the next year’s earnings has improved 0.2% in the last seven days.
Image Source: Zacks Investment Research
Attractive Valuation
The stock has a forward P/E of 17.02X, compared with the industry’s P/E of 14.94X and the S&P 500’s P/E of 18.52X. It has a P/S of 2.67X, compared with the industry’s P/S of 2.26X and the S&P 500’s P/S of 3.09X. MS has a P/B of 3.19X, compared with the industry’s P/B of 2.74X and the S&P 500’s P/B of 3.71X.
View the Zacks #1 Rank List
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4 Thriving Investment Bank Behemoths to Buy With Attractive Valuation
Key Takeaways
The investment bank industry is on a rally this year backed by increased client activity, a rebound in underwriting and advisory businesses, a solid trading business and the massive application of artificial intelligence (AI) boosting long-term efficiency. This trend is likely to continue for the rest of this year.
The Zacks-defined Financial – Investment Bank industry is currently in the top 16% of the Zacks Industry Rank. In the past year, the industry has provided 26.7% returns, while its year-to-date return is 12.8%. Since it is ranked in the top half of the Zacks Ranked Industries, we expect the Investment Bank industry to outperform the market over the next three to six months.
At this stage, we recommend buying shares of four investment bank giants with a favorable Zacks Rank. These stocks have rallied more than 20% in the past six months, yet they are currently trading at attractive valuations.
These stocks are: JPMorgan Chase & Co. (JPM - Free Report) , The Goldman Sachs Group Inc. (GS - Free Report) , Citigroup Inc. (C - Free Report) and Morgan Stanley (MS - Free Report) . Each of our picks currently carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our four picks in the past six months.
Image Source: Zacks Investment Research
JPMorgan Chase & Co.
Zacks Rank #2 JPMorgan Chase remains well-positioned given the current operating backdrop. JPM has been witnessing solid gains in capital markets and investment banking (IB). JPM continues to expand its physical and digital distribution network, which supports primary banking relationships, cross-selling opportunities in cards and auto loans, and long-term deposit share gains.
JPM’s consumer franchise keeps widening, with U.S. branch builds and Chase digital growth in Europe, while scale, diversified revenues and disciplined balance sheet management aid durable earnings. JPM’s higher-for-longer rate regime will aid net interest income (NII), and solid markets activity, IB fees and asset management flows will drive fee income.
Strong Estimate Revisions
JPMorgan Chase has an expected revenue and earnings growth rate of 13.3% and 22.6%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 0.1% in the last 60 days.
JPM has an expected revenue and earnings growth rate of 55.8% and 58.7%, respectively, for the next year. The Zacks Consensus Estimate for the next year’s earnings has improved 9.3% in the last 60 days.
Image Source: Zacks Investment Research
Attractive Valuation
The stock has a forward P/E of 14.38X, compared with the industry’s P/E of 14.94X and the S&P 500’s P/E of 18.52X. It has a P/S of 3.20X, compared with the industry’s P/S of 2.26X and the S&P 500’s P/S of 3.09X. JPM has a P/B of 2.70X, compared with the industry’s P/B of 2.74X and the S&P 500’s P/B of 3.71X.
The Goldman Sachs Group Inc.
Zacks Rank #1 Goldman Sachs has been benefiting from strong revenue growth in Global Banking & Markets and Asset & Wealth Management. GS’ strong capital and liquidity position aids shareholder returns, including an 11% dividend hike post-clearing 2026 Fed stress test.
GS is prioritizing durable revenue streams, with improving deal activity and a strong investment banking backlog supporting advisory and fee-income growth. GS’ private credit expansion is expected to diversify revenue and drive long-term growth.
Strong Estimate Revisions
Goldman Sachs has an expected revenue and earnings growth rate of 21.1% and 34.2%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 13.5% in the last 60 days.
GS has an expected revenue and earnings growth rate of 1.6% and 4.9%, respectively, for the next year. The Zacks Consensus Estimate for the next year’s earnings has improved 7.3% in the last 60 days.
Image Source: Zacks Investment Research
Attractive Valuation
The stock has a forward P/E of 15.08X, compared with the industry’s P/E of 14.94X and the S&P 500’s P/E of 18.52X. It has a P/S of 2.24X, compared with the industry’s P/S of 2.26X and the S&P 500’s P/S of 3.09X. GS has a P/B of 2.76X, compared with the industry’s P/B of 2.74X and the S&P 500’s P/B of 3.71X.
Citigroup Inc.
Zacks Rank #2 Citigroup’s simplified operating structure is reducing complexity, improving efficiency, and allowing capital to be redirected toward higher-return businesses. C’s expanding private-market capabilities will likely drive fee income growth, while strong liquidity profile and improving efficiency support capital returns.
Citigroup expects NII (excluding Markets) to increase 5-6% on a year-over-year basis in 2026. Management anticipates an efficiency ratio of 60% in 2026, with another year of positive operating leverage.
Strong Estimate Revisions
Citigroup has an expected revenue and earnings growth rate of 12.1% and 40.7%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 0.1% in the last 30 days.
C has an expected revenue and earnings growth rate of 4.3% and 15.5%, respectively, for the next year. The Zacks Consensus Estimate for the next year’s earnings has improved 2.9% in the last 60 days.
Image Source: Zacks Investment Research
Attractive Valuation
The stock has a forward P/E of 12.29X, compared with the industry’s P/E of 14.94X and the S&P 500’s P/E of 18.52X. It has a P/S of 1.35X, compared with the industry’s P/S of 2.26X and the S&P 500’s P/S of 3.09X. C has a P/B of 1.21X, compared with the industry’s P/B of 2.74X and the S&P 500’s P/B of 3.71X.
Morgan Stanley
Zacks Rank #2 Morgan Stanley benefits from a durable wealth and asset management franchise that supports steadier fee income and deep client relationships, with strategic alliances adding to long-term growth.
MS’ IB business will benefit from a healthier deal environment, supported by a robust and diversified pipeline. MS’ alliance with Mitsubishi UFJ Financial Group continues to enhance its competitive position in Japan through combined research, sales and execution and coordinated underwriting.
Strong Estimate Revisions
Morgan Stanley has an expected revenue and earnings growth rate of 15.9% and 25.4%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 0.1% in the last seven days.
MS has an expected revenue and earnings growth rate of 3.6% and 2.2%, respectively, for the next year. The Zacks Consensus Estimate for the next year’s earnings has improved 0.2% in the last seven days.
Image Source: Zacks Investment Research
Attractive Valuation
The stock has a forward P/E of 17.02X, compared with the industry’s P/E of 14.94X and the S&P 500’s P/E of 18.52X. It has a P/S of 2.67X, compared with the industry’s P/S of 2.26X and the S&P 500’s P/S of 3.09X. MS has a P/B of 3.19X, compared with the industry’s P/B of 2.74X and the S&P 500’s P/B of 3.71X.