Report published October 1, 2026
Americas Investment Banks: Into 3Q26 EPS, Mid-Cycle and Air Pocket Concerns Weigh, Although Long-Term M&A Ingredients Intact – Goldman Sachs Research
Goldman Sachs · October 1, 2026
Goldman Sachs previews 3Q26 earnings for Americas independent investment banks, noting that while mid-cycle concerns and a deal air pocket are weighing on near-term estimates, depressed valuations at 45th percentile levels provide an attractive entry point. The team favors firms geared to mid-cap and financial sponsor activity or displaying defensive margins, highlighting EVR, HLI, LCLN, and PIPR as preferred Buys.
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Finvaulta summarizes Goldman Sachs's analysis. Attribute opinions, forecasts, time-sensitive values, and chronology to the issuer and report date; do not treat this page as an independent verification or a current market-data source.
Key Takeaways
- 1.Valuations for independent investment banks have derated to later-cycle levels (~14.5x NTM P/E, 45th percentile over the last decade), offering an attractive entry point despite near-term headwinds.
- 2.A near-term M&A air pocket is driving downward estimate revisions; 3Q26 announced M&A volumes fell ~5% YoY and 30% QoQ, prompting cuts to 2026E/2027E/2028E group top-lines by 2%/1%/1%.
- 3.Operating leverage is pressured by structural comp inflation (elevated MD compensation and fixed guarantees) and mounting non-comp expenses (AI infrastructure, data subscriptions, and travel).
Table of Contents
- Four key themes
- Strategic/large-cap M&A
- Sponsor/mid-cap M&A
- Preferred Buys
- EVR
- HLI
- LCLN
- PIPR
- Valuation and new vs. old
- New vs. old: -
Report data
Exhibit 72: Old vs. new estimates and price targets
| Metric | Estimate | Context |
|---|---|---|
| Announced M&A Volume Growth | -5% | 3Q26 announced M&A volumes slowed, driven by large-cap and strategic deal air pockets. |
| Group NTM P/E Multiple | 14.5 x | Independent investment banks trade at ~14.5x NTM P/E on GSe, corresponding to the 45th percentile over the last decade. |
| Global M&A Industry Volume Forecast Growth | 20% | Proprietary regression model projects global M&A volume growth over the next twelve months. |
| Average 12-Month Price Target Change | -9% | Target multiples reduced by 1.3x on lower market multiples, resulting in an average 9% price target reduction. |
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