Boutique Investment Banks: 2Q26 Preview; Industry Trends Improving; MC Top Pick

Research evidence excerpt

Boutique Investment Banks: 2Q26 Preview; Industry Trends Improving; MC Top Pick

Deutsche Bank

Research

North America Industry Date

Banks - Investment Banking Boutique Investment 9 July 2026

Banks

2Q26 Preview; Industry Trends Improving;

Nathan Stein MC Top Pick

Research Analyst

+1-212-250-3462

Summary

In this note, we update our model assumptions ahead of 2Q earnings and refresh

thoughts on the group. Independent IB stocks have lagged in recent months,

though industry fundamentals have been solid and suggest an improving middle

market backdrop. While investor focus remains on macro uncertainty, software

valuations, and existential AI-related disruption risks, our analysis suggests M&A

activity (both strategic and sponsor-backed) is widening out more than

appreciated. We like MC the most into earnings as we believe the bar has been

lowered despite constructive underlying activity trends.

The stocks

• Investment bank stocks are now down 9% over the past three months

(through yesterday’s close) on average (EVR/HLI/MC under coverage as

well as LAZ/PIPR/PJT/PWP) and down 13% YTD. This compares to the

S4FINL index up 4% YTD with the S6FINL index up 11%.

• The continued lag is driven by persistent pressure on software company

valuations (impacting sponsor abilities to sell portfolio companies), and

ongoing geopolitical uncertainty (and the related oil volatility). More

recently there has been growing debate on the long-term viability of the

investment banking business model as AI continues to evolve. See our

note Investment Banks: How Much Do Comp Ratios Really Matter?)

wherein we provide a counterpoint to the view that fewer MDs and

absolute cost control mean better stock performance.

We remain positive on the group overall and believe the bear case is well known