Lazard (LAZ – Research Report), the Financial sector company, was revisited by a Wall Street analyst today. Analyst Steven Chubak from Wolfe Research upgraded the rating on the stock to a Buy and gave it a $42.00 price target.
Steven Chubak has given his Buy rating due to a combination of factors that suggest Lazard’s stock (ticker: LAZ) presents a more favorable risk-reward profile looking ahead to 2024. After a challenging year in 2023, Chubak identifies several key drivers for the upgrade, including the potential for significant upside from improved productivity targets in the Advisory segment, which are not yet factored into the current valuation. He posits that a more than 50% increase in managing director productivity and operating margin normalization could be feasible. Additionally, concerns regarding large-scale acquisitions in the Asset Management division seem exaggerated, and Lazard’s shares stand out as attractive on a normalized earnings per share basis for the year 2025.
Further influencing the Buy rating is the anticipation of a return to targeted compensation ratios by 2025, aided by strategic headcount reductions, making Lazard one of the few firms expected to reach these levels. The valuation risk for 2025 is believed to be already accounted for in the current multiple. Moreover, the conversion to a C-Corp structure could provide additional upside optionality, as alternative investment multiples typically expand post-announcement. Chubak’s positive outlook is bolstered by recent meetings with Lazard’s CFO and Head of IR, which reinforced confidence in the company’s long-term strategy and targets set by the CEO, as well as the firm’s inorganic growth strategy and new compensation structure.
Chubak covers the Financial sector, focusing on stocks such as Citigroup, KKR & Co, and Lazard. According to TipRanks, Chubak has an average return of 13.4% and a 63.41% success rate on recommended stocks.
In another report released on December 20, Argus Research also maintained a Buy rating on the stock with a $44.00 price target.
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Lazard (LAZ) Company Description:
Lazard Ltd. is a financial advisory and asset management firm, which engages in the provision of crafting solutions to the clients, including corporations, governments, institutions, partnerships, and individuals. It operates through the Financial Advisory and Asset Management segments. The Financial Advisory segment offers corporate, partnership, institutional, government, sovereign, and individual clients, an array of financial advisory services regarding mergers and acquisitions, restructurings, capital structure, capital raising, and corporate preparedness. The Asset Management segment provides global investment solutions and investment management services. The company was founded by Alexandre Lazard, Lazare Lazard, and Simon Lazard in 1848 and is headquartered in New York, NY.
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