Raising Our Fair Value Estimate for Evercore to $172; Near-Term Headwinds But Long-term Value

We are increasing our fair value estimate for narrow-moat Evercore to $172 per share from $158. Our fair value estimate corresponds to a forward price/adjusted earnings multiple of around 14 times and a forward enterprise value/EBITDA multiple of around 11 times. Of the net $14 per share increase in our fair value estimate, $12 was from changes in our modeling of the company's balance sheet, $5 was from increasing our long-run forecast for the company's operating margin by 0.5-percentage points, and $1 was from earnings accrued since our previous valuation update. These positive adjustments were offset by the incorporation of $4 in deductions from our valuation tied to near-term earnings headwinds from the recent worsening of the global economic outlook. We assess the shares as being undervalued currently.