Analyst Note
| Michael Wong, CFA, CPA |Similar to other investment banks, Evercore reported strong first-quarter results. The company reported net income to common shareholders of $144 million, or $3.25 per diluted share, on $662 million of net revenue. Net revenue was 55% higher than a year ago and about 25% higher than the trailing 12-quarter average. CEO confidence has significantly improved since the start of the COVID-19 crisis and financing markets remain accommodative, leading to strong activity in the company’s financial advisory business, which is over 75% of net revenue. Given the expected further opening up of economies from quarantine, economic growth, and demand from special-purpose acquisition companies and private equity funds to do acquisition deals, mergers and acquisitions advisory should remain strong for an extended period. We don’t anticipate making a material change to our $122 fair value estimate for narrow-moat Evercore, and we assess the shares as fairly valued.