Increasing Our Valuation for Evercore to $177; 2024 Likely Start of Investment Banking Recovery

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. Net revenue in 2023 was 26% lower than the 2021 peak, as interest rates and economic uncertainty increased. With global interest rates likely having peaked and increasing market expectations of a relatively mild economic slowdown, in contrast to a recession, in the US, Evercore's revenue and earnings should be on an uptrend starting in 2024. However, we’re currently forecasting that it will take multiple years for the company to exceed its 2021 revenue level.