Lazard: Increasing Our Fair Value Estimate; There's More Upside If Management Can Achieve Its Goals

We are increasing our fair value estimate to $48 from $37.50 per share for narrow-moat-rated Lazard. Our fair value estimate equates to a forward price/adjusted earnings ratio of 15 times and an enterprise value/EBITDA ratio of 12.5 times. Of the $10.50 increase in our fair value estimate, approximately $1 was from earnings since our previous valuation update, $5 was from a change in our working capital assumption, $2.50 was from increasing our forecast operating margin by 1 percentage point, and the remainder was due to miscellaneous adjustments, such as higher assets under management after the increase in the stock market.