Oppenheimer Holdings: Public Markets Come Back, Driving ECM And Profits

2026-02-05 00:01:11 ET

Oppenheimer Holdings ( OPY ) had a good quarter driven by relatively fixed costs and therefore operating leverage across its segments. While wealth management did well on higher AUMs and greater market valuations, a big drive came from the capital markets business, which inflected aggressively into positive territory, something we considered likely to happen in the lower cost of capital environment in our previous coverage . PEs on annualised net income are below rule-of-thumb benchmarks for valuations of AM-focused businesses and even lower than blended averages of AM and IB businesses, where the latter typically command higher PEs. It remains good value, though upside may continue to be capped by corporate governance considerations, and we wonder how sustainable the relatively flat comp expenses will be, particularly in capital markets as the business scales, though the current performance can be looked at as a return to a decent baseline profitability....

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