We're Adding to Two Financial Holdings, While Upgrading One
Market volatility and continued M&A should drive investment banking fees and market revenue in Q1 2026.
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| Symbol | Transaction Type | # Shares Traded | Recent Price $ | Shares Owned After Trade | % Portfolio |
|---|---|---|---|---|---|
|
BAC |
Buy |
245 |
48.75 |
4,245 |
3.85 |
|
MS |
Buy |
62 |
161.75 |
1,300 |
3.90 |
After you receive this Alert, the Pro Portfolio will make the following trades:
-- Buy 245 shares of Bank of America (BAC) at or near $48.75. Following the trade, BAC shares will account for roughly 3.85% of the Pro Portfolio.
-- Buy 62 shares of Morgan Stanley (MS) at or near $161.75. Following the trade, MS shares will account for roughly 3.9% of the Pro Portfolio.
After locking in some nice gains in BAC shares in January near $57, MS and BAC shares have pulled back over the last few weeks. We are now using the retrenchment to round out these two position sizes. We continue to see both names benefiting from the expected vibrant IPO market this year as well as continued M&A activity, but also recent market volatility that should fuel their trading and market revenue.
As we make this move, we will also upgrade BAC shares to a One rating. We’ll also reset our BAC panic point to $42 from $47, and do the same for MS, putting its at $145.
SpaceX and 2 IPO Filings From Bill Ackman
While the IPO market has been rather quiet of late, eyes remain focused on several high-profile transactions targeted for later this year, including OpenAI and Anthropic. One of the larger expected IPOs is from Elon Musk’s SpaceX, which should generate a whopper of fees. Reports today imply Musk is angling to include SpaceX in the Nasdaq 100 (NDX), which houses the 100 largest non-financial companies listed on the Nasdaq stock exchange. Those same reports indicate SpaceX is seeking a valuation of around $1.75 trillion for the IPO.
meanwhile, billionaire investor Bill Ackman's Pershing Square filed for U.S. initial public offerings of its flagship hedge fund and a new fund on Tuesday, looking to join a small club of publicly traded alternative asset managers. Pershing Square USA currently expects to raise between $5 billion and $10 billion in the combined transaction. Bank of America is among the named underwriters for that combined offering, but a successful offering would help speed the return of the IPO market. That would help lift our shares of Morgan Stanley and BofA.
Citi Sees Mid-Teens Investment Banking and Markets Revenue Growth
Sticking with investment banking activity, speaking at the RBC Conference today, Citigroup (C) CEO Jane Fraser said she sees the company’s investment banking and markets revenue growing by a mid-teen’s percentage in Q1 2026. We know volatile markets tend to be favorable for market revenue at two of our holdings, Morgan Stanley and Bank of America, but Fraser's comment about M&A activity not missing a beat also keeps us bullish on MS and BAC shares while we wait the bounce back in IPO activity.
And for what it’s worth, Fraser also joins us in thinking the duration of the US-Iran conflict is what matters most.
Related: 2 Insulated Markets as Asia Oscillates on Oil
More Pro Portfolio:
- Exiting One Position and Initiating Another as We Become More Defensive
- 25 Signals Across 9 Investing Themes
- Weekly Roundup: S&P Drops 2%, Portfolio Barely Blinks. Here's Why.
(Please note that we are looking to execute these trades at or near the share price mentioned above. Once the trade is completed, subscribers can see the trade's executed price here. Be sure to toggle the chart to sort by Purchase Date.)
At the time of publication, TheStreet Pro Portfolio was long BAC and MS.
