ALL HAIL GORMAN
MS chief new Wall St. king: analyst
Move over Jamie Dimon. Wall Street has a new banking king.
A leading analyst anointed Morgan Stanley’s chief executive as the new leader of Wall Street on Friday following a gangbusters quarter — calling an end to the longtime reign of Dimon at JPMorgan Chase.
“There is simply no CEO in the financial industry better than James Gorman,” Dick Bove, an outspoken analyst at Rafferty Capital Markets, gushed in a Friday letter about the Morgan Stanley chief executive.
“There is actually no one in his industry that has achieved more than he has,” Bove added.
Wall Street’s version of “Game of Thrones” has been heating up recently after some bank honchos, like Goldman Sachs’ Lloyd Blankfein, have made way for younger executives. Goldman named David Solomon, who’s also a part-time DJ from Westchester.
Other banks have been making broad changes, too. Citigroup recently announced a C-Suite shuffle ahead of its chairman’s planned retirement next year.
Dimon, who’s led JPMorgan since late 2005, is likely to retire around 2022, insiders say, but his plans could change.
Bove credits Gorman (pictured) for turning around Morgan Stanley after the bank nearly fell into bankruptcy and emphasizing its money-making wealth management business. Still, Dimon, 62, has plenty of fans on The Street.
“I think we are stretching to say that [Gorman] has dethroned the king of the hill,” said Marty Mosby, an analyst at Vining Sparks.
“There’s no way to say that he has surpassed Jamie Dimon. I think he has caught up with Goldman, though,” Mosby added.
The comments come just days after Morgan Stanley reported quarterly earnings that beat expectations in all its major businesses, the only major bank to do so this quarter — sending the stock soaring. JPMorgan, which has a market cap nearly five times as large as Morgan Stanley’s, has had a higher return on equity for years. But it also reported a 10 percent drop in quarterly bond trading last week, sending its shares down.
Bove’s anointing of the Australian Gorman comes less than a year after a rave review of JPMorgan.
“My view of this company is that it is probably the best bank I have ever followed in 5 decades of analyzing companies,” Bove wrote in a January note on Dimon’s bank.
Still, Bove was pessimistic on the industry that he covers.
“This is not the time to buy bank stocks. It’s the time to step aside,” he said in a Friday interview.
In particular, he took aim at Morgan Stanley’s biggest rival: Goldman.
“Take this Goldman Sachs thing, where people had all these orgasms,” Bove said. “Where did all this profit come from? It came from tax cuts.”
Still, Bove is waiting to see if Solomon, Goldman’s new chief executive, could be the next top Wall Street model. “I have a lot of faith that this guy [Solomon] is going to do it — but he hasn’t done it yet,” Bove said.