Investment Banks Expect IPOs to Pick Up in Second Half

Investment banks Evercore and Stifel Financial reportedly expect initial public offerings (IPOs) to pick up in the second half.

Both banks’ executives said during earnings calls held Wednesday (July 30) that heightened activity in the markets could be driven by a reduction in volatility and an easing of regulations by the White House, Bloomberg reported Wednesday.

Evercore reported a 4% year-over-year increase in its equity and debt underwriting fees during the most recent quarter, and Chairman and CEO John Weinberg said, “we expect these positive trends to continue as we enter the second half,” according to the report.

Stifel reported that its equity capital raising revenues fell 3.7%, but CEO Ron Kruszewski said during the company’s earnings call that it is “seeing early signs of a broader IPO recovery and follow-on activity remain sponsor-driven, with private equity continuing to lead issuance.”

Last week, another mid-market investment bank, Raymond James Financial, reported that its equity underwriting revenue grew by 15% year over year. Executives said the market’s mood had picked up after the uncertainty caused by the announcements of tariffs in April, according to the report.

“We could be shocked again tomorrow, who knows, but certainly the market sentiment now is more positive than it was in early April,” Raymond James CEO Paul Shoukry said, per the report.

It was reported June 8 that IPOs remained scarce, with just nine private equity-backed IPOs at that point in the year in Europe and the United States, compared to 116 in the same period in 2021.

In January, it was reported that while there had been hopeful reports about an IPO resurgence, some Wall Street analysts were urging caution following a lukewarm reaction to natural gas firm Venture Global’s valuation target for its IPO.

The company had hoped for a $110 billion price tag but settled for a 45% downgrade when it sold its shares. One analyst said at the time that IPO investors were “scrutinizing deals carefully.”

Earlier in January, it was reported that investment bankers were preparing for a dealmaking uptick in equity capital markets fueled by a promising stable of IPOs by high-profile companies and rising capital markets activity driven by greater economic confidence.