Evercore Earnings: As Expected, Results Were Weak and Environment Remains Challenging

As expected, Evercore’s first-quarter earnings were relatively weak, and the environment remains challenging, so we don’t forecast a strong recovery in the near term. The company reported net income to common shareholders of $83 million, or $2.06 per diluted share, on $572 million of net revenue. Net revenue declined 21%, and operating income declined 49% from the previous year, as the company was still working on its strong deal backlog at the beginning of 2022 and about the full force of macroeconomic uncertainty is currently affecting results. The $572 million of net revenue in the quarter is the lowest since 2020 when the world was uncertain of the effects of COVID-19. While we believe earnings will remain subdued for a year, we believe shares are undervalued looking at longer-term earnings, and we don’t expect to make a material change to our $166 fair value estimate for narrow-moat-rated Evercore.