Likely a Tough Year or Two Ahead for Evercore

Evercore’s revenue and earnings could experience a relatively tough year or two compared with the outstanding results that it booked in 2021. Starting in the back half of 2020 and especially after successful COVID-19 vaccines were announced, merger and acquisition volume picked up, and Evercore subsequently grew revenue over 45% in 2021. Revenue in 2021 was abnormally high and was destined to normalize lower, in our opinion. The 16% decline in revenue in 2022 was partly due to normalization and partly due to the U.S. Federal Reserve and other central banks enacting more restrictive monetary policies to rein in inflation and the related prospect of a recession.