Copyright Benzinga
Piper Sandler Companies (NYSE:PIPR) is well-positioned for best-in-class top-line growth, driven by its exposure to both structural and cyclical growth sectors within investment banking. Goldman Sachs analysts, led by James Yaro, upgraded Piper Sandler to Buy from Neutral and with a price forecast of $386, representing an 18% upside from the stock's recent close. Goldman projects a 12.5% revenue CAGR through 2027, roughly 200 basis points above its peers, driven by leadership in four growth segments: mid-cap M&A, financials, capital markets, and tech M&A, as well as municipal finance, alongside stable margins and limited compensation leverage. Also Read: EXCLUSIVE: Webull CEO Says ‘International Growth Even Trumps The US Growth’ M&A Backlog Outperforms Competition The firm's M&A backlog is up about 110% since early 2024, more than double peer growth. The analysts highlighted Piper Sandler's strong position in mid-cap M&A, which makes up 65% of its fees since 2019, substantially exceeding the group average of 48%. As mid-cap deal volumes have declined more sharply this cycle than large-cap transactions, Goldman sees potential for a faster rebound due to higher deal turnover. Tailwinds in Financials Investment Banking Goldman Sachs said Piper Sandler's strong financials-focused investment banking and trading operations are well-positioned to benefit from a rebound in sector activity, with global bank M&A on track to more than double its 10-year average in 2025 and U.S. bank M&A up about 70%. The firm expects continued momentum in financials M&A and debt capital markets, supported by potential deregulation and lower unrealized losses on bank balance sheets as interest rates decline. Goldman estimates 6-12% revenue and 10-18% EPS upside if the segment normalizes. Strategic Growth in Technology M&A The analysts noted that Piper Sandler's continued investment in the technology sector, the largest source of M&A fees, is a key driver of growth. The firm has expanded its tech advisory business through both organic initiatives and acquisitions, capturing a larger share of a market that represents about 21% of total M&A activity in 2025. Goldman expects further investments in this segment to accelerate growth and strengthen Piper's competitive position. Cyclical Upside in Municipal Finance Goldman said Piper Sandler's municipal finance business is poised for cyclical growth as interest rates decline. With the Fed expected to cut rates five times between 2025 and 2027, the firm projects a 14% annual increase in muni finance revenue from 2024 to 2027, noting that activity historically rises when rates fall. Goldman forecasts revenue of $1.75 billion in 2025, rising to $1.99 billion in 2026, and EPS of $15.37 and $17.94, respectively. Price Action: PIPR shares were trading higher by 0.02% to $335.35 at last check Tuesday. Read Next: Why Nike’s Price Dip Could Mean Bigger Profits Ahead Photo by Create Jobs 51 via Shutterstock
