Evercore Has Headwinds, but We Believe It's Undervalued

Evercore reported fairly strong first-quarter results, but the uncertain macroeconomic environment and normalization from cyclical revenue highs in 2021 could weigh on its revenue and earnings for years. That said, we believe there’s value based on where the shares are currently trading compared with our revised fair value estimate of $168. We project that normalized earnings per share for narrow-moat Evercore should be $12-$14 and that normalized revenue growth for the company after rebasing from the cyclically high 2021 level will be in the midsingle digits, so the company appears undervalued at less than $110 per share currently.