U.S. Economic Expectations and Evercore's Earnings Should Be Stabilizing

The end of Evercore’s revenue and earnings downturn should be near. 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 Federal Reserv and other central banks enacting more restrictive monetary policies to rein in inflation and the related prospect of a recession.