The Uneven Investment Banking Cycle: Four Key Themes Exiting 1Q26 Earnings

Investment bank stocks have underperformed recently as the market grapples with a bifurcated M&A cycle where strategic deals thrive but sponsor activity lags. Goldman Sachs maintains a bias toward firms with structural growth or countercyclical restructuring exposure, such as EVR, HLI, PIPR, and PJT.

Key Takeaways

• 1.M&A recovery is uneven, with strategic and large-cap M&A showing robust growth (up 54% and 74% YTD YoY) while sponsor-backed M&A remains sluggish (down 2% YoY).
• 2.Restructuring demand remains high and is expected to stay elevated due to rising bankruptcy filings and a looming debt maturity wall in 2028-29.
• 3.Structural growth in the secondaries market continues as sponsors turn to continuation funds and alternative mechanisms for liquidity.

Table of Contents

• Key debates
• Debated stocks
• Valuation and new vs. old
• Appendix
• Disclosure Appendix

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