Oppenheimer Downgrades Goldman, Says M&A Rebound ‘Delayed or Cancelled’

The M&A bounce investors expected after U.S. President Donald Trump’s return to the White House and hopes for light-touch regulation haven’t happened, and one brokerage firm on Wednesday downgraded its rating on Wall Street giant Goldman Sachs (GS).

Oppenheimer analysts called the expected M&A rebound “delayed or cancelled” and downgraded their ratings to “perform” from “outperform” for three financial firms whose fortunes hinge on busy Wall Street activity: Goldman, private equity titan Carlyle Group (CG), and Jefferies Financial Group (JEF). 

“Coming into this year, we were very optimistic about a major rebound in M&A activity, and its attendant financing activity,” the analysts wrote in a note.

“There is, however, thus far no visible sign of this M&A rebound,” they added, noting that so far this year, deal volume is just 2.4% higher than it was last year, while equity capital markets volumes—which show fundraisings from initial public offerings (IPOs) and other share sales—have gained only 2.7%.

M&A Activity Set for Halt Amid Tariffs, Oppenheimer Says

The Oppenheimer analysts were also downbeat on the outlook for M&A picking up anytime soon. “We fear that the current uncertainty over tariffs, a fiscal ‘detox’ and the general upheaval of 80 years of trade and security arrangements is likely to cause a pause in M&A activity,” they wrote.

Since he regained the White House, Trump has made a series of on-again, off-again tariff announcements against the U.S.’s major trading partners, with some of them already imposing retaliatory levies.

Bankers had touted more deals under a Trump presidency, noting that less regulation, lower interest rates, and high and rising stock market valuations could fuel deal activity. “There was pent-up demand as 2023 and 2024 were all relatively moribund years with M&A volumes roughly on par with those a decade earlier,” Oppenheimer said.

Shares of Goldman and Jefferies are up in intraday trading Wednesday, while those of Carlyle are about 2.5% higher.