All five of the banks—JP Morgan Chase & Co., Citigroup, Bank of America, Goldman Sachs and Morgan Stanley— exceeded Wells Fargo’s conservative model last quarter, with capital markets revenue—generated by charging a fee for providing liquidity to markets—increasing 25% across the board after declining every year since 2020. Total capital markets revenue for all five banks was $128 billion last year, and is expected to hit $139.4 billion next year.

The stocks from four of the banks are listed as overweight, meaning the analysts believe they will outperform the market: Goldman Sachs’ current price is listed at $505.15, with a target of $550; JP Morgan’s current price is $212.75, with a target of $225; Citigroup is listed at $67.36, targeting $85 and Bank of America is listed at $44.15, targeting $52. Only Morgan Stanley is listed as equal weight, meaning the researchers expect it will match market movements, with a listed price of $107.81 targeting $99.00

“While global revenues have lagged trends at US banks, the trend appears to have reversed to the upside,” wrote Wells Fargo Securities equity analysts Mike Mayo, Christopher Spahr and Robert Rutschow, in the report published today. “Bank managements gave positive commentary about the capital markets recovery being in early stages and highlighted significant dry powder still to be deployed by private capital.”

Based on the banks’ quarterly reports published over the past five days, Morgan Stanley’s capital markets revenue was up 24% year over year, JP Morgan’s was up 18%, Goldman Sachs was up 14%, Citigroup was up 13%, and Bank of America was up 11%.

Revenue from the most recent four quarters which the banks have been required to publish is higher than any four quarters since the quarter ending 2022. Overall revenues were up 5% from the fourth quarter 2023 trough. All key areas showed improved rolling four quarters revenues, including for mergers, debt underwriting, equity underwriting, and fixed income and equities sales and trading (FICC).