Lazard Ltd Shs A LAZ

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.