Lazard Earnings: Relatively Strong Results; Potentially Lower Compensation Ratio a Surprise

Lazard’s results are holding up fairly well, and management opened up the possibility that 2025 earnings could be stronger than expected. For the third quarter, the company reported net income to common shareholders of $108 million, or $1.02 per diluted share, on $785 million of net revenue. Net revenue included $114 million from the sale of an office building, and adjusted net revenue according to the company was $646 million with adjusted net income of $0.38 per share. The $646 million of adjusted net revenue was still strong, up 21% from a year ago, but was down 6% sequentially and down 13% from the first quarter of 2024. We don’t anticipate making a material change to our $49 fair value estimate for narrow-moat-rated Lazard; we assess the shares as fairly valued.