Goldman Sachs analyst James Yaro discusses the performance of retail brokers and investment bank stocks in his coverage.

Retail Broker Sector: In particular, the analyst noted that Coinbase Global, Inc. ( COIN ) , Robinhood Markets, Inc. ( HOOD ) and Interactive Brokers Group, Inc. ( IBKR ) witnessed an average rise of about 35% since April 1, 2025, significantly outperforming the S&P 500 by 31 percentage points.

Yaro writes that this indicates ongoing optimism about the retail trading environment, supported by robust April metrics.

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The analyst says he remains positive on retail trading, noting that current levels are still considerably below historical highs when adjusted for account growth.

Yaro estimates 12%/5% revenue and EPS CAGRs from 2024-2027, driven by robust account acquisition, strong assets gathering, and a cyclically supportive retail trading environment.

Yaro projects compound annual growth rates (CAGRs) of 12% for revenue and 5% for EPS from 2024 to 2027, based on strong new account acquisition, robust asset gathering, and a cyclically supportive retail trading environment.

Investment Bank Sector: Stocks are up 7% since the same date, slightly outperforming the S&P 500 by three percentage points, adds the analyst.

Yaro says that the cyclical recovery in investment banking appears to have been delayed again, with disclosed industry M&A fees down 34% quarter-to-date year-over-year and ECM/DCM volumes falling 44%/41% in April year-over-year.

The analyst adds that the market likely needs more concrete signs of an investment banking recovery for the stocks to continue outperforming from this point on.

Given the base case scenario of limited mergers and acquisitions activity this year, the analyst anticipates a modest 3% year-over-year increase in total revenue for 2025.

In the near term, the analyst’s model forecasts a 2% quarter-over-quarter revenue decline for the second quarter of 2025.

Nevertheless, Yaro maintains a positive outlook for the medium term, projecting revenue growth of 16% in 2026 and 10% in 2027.

Overall, he views companies with more consistent structural growth prospects as positive, including Buy-rated Houlihan Lokey, Inc. ( HLI ) , HOOD, and IBKR.

Yaro also favors companies with an underappreciated counter-cyclical business, such as our Buy-rated Evercore Inc. ( EVR ) , and companies with the potential to gain market share, which includes all four mentioned.

In particular, he anticipates a strong trading environment to support HOOD and IBKR, while HLI should experience through-the-cycle growth from ongoing momentum in Corporate Finance and benefits from restructuring and inorganic growth execution.

Yaro forecasts EVR to deliver best-in-class revenue growth from 2025 to 2027 and sees potential upside for EVR through its exposure to Equity Capital Markets (ECM).

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