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Lazard Ltd LAZ

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Morningstar’s Analysis

Valuation
Currency in USD
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Lazard’s Relative Underperformance Is Better Than It Seems, and Stock Is a Relative Bargain

Michael Wong, CFA, CPA Sector Director

Analyst Note

| Michael Wong, CFA, CPA |

Lazard’s revenue and earnings growth arguably underperformed investment banking peers, but it’s not as bad as it seems, and the share price is trading at a relative bargain to many other financial sector stocks. Lazard reported net income of $87.3 million, or $0.75 per diluted share, on $660 million of net revenue. Operating net revenue increased 15% from the previous year and decreased 24% sequentially with approximately 8% year-over-year growth in advisory revenue and 22% growth in asset management revenue. The 8% growth in advisory revenue compares with many other investment banks that had advisory revenue growth upwards of 30%. We don’t anticipate making a material change to our $47 fair value estimate for narrow-moat Lazard. Shares are currently trading at a high-single-digit percentage discount to our fair value estimate, which is a relative bargain compared with many financial stocks that we cover that are trading above their fair value estimates.

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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 Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 3,100

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