Devin Ryan, Senior Research Analyst at Citizens, laid out a bullish setup for big banks on Monday’s CNBC segment ahead of Q2 earnings. He said: “Tomorrow is going to be, I think, a really good day to kick things off for the top six banks. We’re looking for about 25% year-over-year earnings growth.”
With Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, and Wells Fargo all reporting before the open on Tuesday, July 14, and Morgan Stanley following on Wednesday, July 15, the setup is concentrated and driven by the revival of capital markets along with commercial lending.
Goldman Sachs and Morgan Stanley Could Lead the Bank Earnings Boom
Ryan’s core call is that the biggest upside among the big banks could sit with the most capital-markets-levered franchises. “The companies that are going to do the best are probably the ones more exposed to capital markets. So SpaceX IPO, M&A announcements are up 50% year-to-date through the first half. And so Goldman Sachs, Morgan Stanley probably going to be standouts. We’re looking for almost 40% earnings growth out of both of those.”
Goldman Sachs Is Built for the Capital Markets Revival
Q1 2026 validated the direction. Goldman Sachs (NYSE:GS | GS Price Prediction) posted EPS of $17.55 on $17.23 billion in revenue, with investment banking fees of $2.84 billion up 48% and advisory revenues nearly doubling at $1.49 billion, up 89%. CEO David Solomon said, “Goldman Sachs delivered very strong performance for our shareholders this quarter, even as market conditions became more volatile” in the firm’s Q1 release.
Morgan Stanley Enters Earnings With Record Momentum
Morgan Stanley (NYSE:MS) delivered its own record. Ted Pick’s team reported $20.58 billion in revenue, EPS of $3.43, ROTCE of 27.1%, and advisory revenue up 74% to $978 million. Ryan’s near 40% earnings growth expectation follows Q1 net income growth of 29%.
Wall Street’s Rebound Is Lifting America’s Biggest Banks
Ryan sees the capital markets tailwind lifting the rest of the group. JPMorgan Chase (NYSE:JPM) opened 2026 with EPS of $5.94, up 17%, record Markets revenue of $11.6 billion, and advisory fees up 82% to $1.27 billion. Jamie Dimon flagged “increased fiscal stimulus, the benefits of deregulation, AI-driven capital investment and the Fed’s asset purchases” as tailwinds.
Bank of America (NYSE:BAC) grew EPS 25% year-over-year to $1.11, with equities trading up 30% and investment banking fees up 21%. Citigroup (NYSE:C) delivered net income up 42% and Markets revenue crossing $7 billion for the first time, with equity markets up 39%. Wells Fargo grew EPS 15%, with CIB Markets up 19% and equity capital markets share expanding.
The Next Banking Opportunity May Be Hiding Outside the Mega Banks
Capital markets stocks were up nearly 50% last year and up 20% in 2026 to date, with the S&P 500 up 15% in the second quarter. Goldman shares are up 21.19% year-to-date, and Morgan Stanley is up 26.55%. Ryan’s cautious because: “We think a lot is actually baked in. And so we’re looking for areas where there’s probably more upside. We still think there’s areas of capital markets like middle market sponsors. Private equity still have quite a way to recover.”
On commercial lending re-acceleration, he pointed to two forces. “So data centers is a big piece of the reacceleration, but then also just capital markets turning back on. So as you think about [the] M&A market that’s been dormant, starting to get back to something more normal that leads to lending opportunities into those deals.”
Key Takeaways
The major banks enter Q2 earnings with strong momentum across investment banking, trading, and commercial lending. Goldman Sachs and Morgan Stanley may deliver the strongest results because of their greater exposure to the capital markets recovery, with Ryan expecting earnings growth of nearly 40% from both firms.
Expectations are already high, however, and much of the rebound may be reflected in mega-bank share prices. The next opportunities could emerge among middle-market firms and other lenders that stand to benefit as private equity activity, M&A, and data center investment recover. A broader market pullback or slowdown in AI-related spending remains the clearest risk to that outlook.
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