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Lazard Ltd Shs A LAZ

Rating as of

Morningstar’s Analysis

Valuation
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Lazard Reported 3Q Record, but Results Weaker Than Peers'

Michael Wong, CFA, CPA Sector Director

Analyst Note

| Michael Wong, CFA, CPA |

Lazard reported its best-ever third-quarter net revenue, but results looked a bit weak compared with peers. Lazard reported net income to common shareholders of $107 million, or $0.94 per diluted share, on $717 million of net revenue. While this was a record third quarter, it wasn’t an overall quarterly record with the second quarter of 2021 and fourth quarter of 2020 both exceeding $800 million in revenue. Looking specifically at financial advisory revenue, it was $381 million, which is about 8% higher than the company’s trailing 12-quarter average. This is a good result for Lazard, but multiple other investment banks reported their highest or second highest quarterly revenue for financial advisory. Given that Lazard specializes in financial advisory and financial advisory composes about half of its revenue, it’s a bit disappointing that the company didn’t have an even more spectacular quarter. We don’t anticipate making a material change to our $51 fair value estimate for narrow-moat Lazard and assess shares as fairly valued.

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Company Profile

Business Description

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, 30% in EMEA, and 10% in Asia-Pacific. Lazard has offices in over 40 cities across more than 25 countries and over 3,000 employees.

Contact
2 Church Street, Clarendon House
Hamilton, HM11, Bermuda
T +1441 2951422
Sector Financial Services
Industry Capital Markets
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 3,100

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