OPY - Oppenheimer: Capital Markets' Outsized Impact On Income

2024-06-07 03:46:45 ET

Summary

• Reduced legal costs were a sustained help for the business, as well as AUM growth and market performance driving solid growth in the private clients business.
• The loss-making capital markets business had an outsized impact in improving performance, with equity and fixed income underwriting coming back to life.
• We are not sure how sustainable the underwriting recovery is, likewise with fixed income brokerage, due to the setting in of the higher for longer reality.
• A combination of lower legal fees and sustained progress in interest yield for Oppenheimer, even with weaker performance assumptions for capital markets, should see meaningful income progress this year.
• Forward PEs could be in the low single digits, subject to a lot of uncertainty due to crude forecasts. Compelling compared to typical AM stock multiples.

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