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Lazard Inc LAZ

Morningstar Rating
$37.44 +0.31 (0.83%)
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Company Report

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.

Price vs Fair Value

LAZ is trading at a 23% discount.
Price
$37.13
Fair Value
$54.00
Uncertainty
High
1-Star Price
$67.10
5-Star Price
$58.40
Economic Moat
Bwmkbv
Capital Allocation
Rnmspqcp

Bulls Say, Bears Say

Bulls

Lazard has the largest geographic footprint among financial advisory-focused investment banks and is in a strong position when global M&A accelerates. The company is well-recognized for its expertise in restructuring, which provides some counterbalance in a recession.

Bears

While the company's restructuring revenue is countercyclical, the majority of its revenue being in merger advisory and asset management is procyclical.

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News

Trading Information

Previous Close Price
$37.13
Day Range
$37.1938.24
52-Week Range
$25.8242.24
Bid/Ask
$37.39 / $39.76
Market Cap
$3.27 Bil
Volume/Avg
828,816 / 1.2 Mil

Key Statistics

Price/Earnings (Normalized)
50.11
Price/Sales
1.30
Dividend Yield (Trailing)
4.86%
Dividend Yield (Forward)
4.86%
Total Yield
8.53%

Company Profile

Lazard has a storied history that can be traced back to 1848. The company's revenue is nearly equally split between financial advisory, such as acquisition and restructuring advisory, and asset management. The company's asset management business is primarily equities (over 80% of assets under management), has an international focus, and is geared toward institutional clients. By geography, the company earns approximately 60% of revenue in the Americas, 35% in EMEA, and 5% in Asia-Pacific. Lazard has offices across more than 20 countries and over 3,000 employees.
Sector
Financial Services
Industry
Capital Markets
Stock Style Box
Small Value
Total Number of Employees
3,291

Competitors

Valuation

Metric
LAZ
SF
EVR
Price/Earnings (Normalized)
50.1115.8228.67
Price/Book Value
7.661.634.42
Price/Sales
1.301.973.05
Price/Cash Flow
8.1510.389.11
Price/Earnings
LAZ
SF
EVR

Financial Strength

Metric
LAZ
SF
EVR
Quick Ratio
1.96
Current Ratio
2.22
Interest Coverage
−0.57
Quick Ratio
LAZ
SF
EVR

Profitability

Metric
LAZ
SF
EVR
Return on Assets (Normalized)
1.57%1.41%8.47%
Return on Equity (Normalized)
17.42%11.50%18.84%
Return on Invested Capital (Normalized)
3.50%
Return on Assets
LAZ
SF
EVR
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Capital Allocation
Economic Moat
Market Cap
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GS
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RJF
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MKTX
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SF
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EVR
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