On Sep 13, we issued an updated research report on Evercore EVR. The company benefits from consistent rise in investment banking revenues owing to strategic initiatives for boosting segments. Moreover, the company's steady capital-deployment activities are commendable.
Nevertheless, steadily rising expenses due to recruitment spree and falling institutional assets under management (AUM), on account of foreign exchange fluctuations, are headwinds.
The Zacks Consensus Estimate for current-year earnings has remained stable at $8.65 over the past 30 days. As a result, it currently carries a Zacks Rank #3 (Hold).
Shares of Evercore have gained 16.9% so far this year, outperforming 13.3% growth of the industry it belongs to.
Evercore’s major revenue contributing segment — Investment Banking — is expected to continue supporting its top line. This is because the company remains focused on undertaking efforts to increase client base in advisory solutions and expand region wise.
Further, strong capital position allows the company to enhance shareholders’ value through steady capital deployment activities. In April, the company hiked its common stock dividend by 16%. Furthermore, the company has a share repurchase program in place with no expiration date. Also, with debt/equity ratio comparing favorably with the broader industry, these capital deployment activities seem sustainable.
However, the investment management unit of Evercore is unlikely to support revenue growth as volatile institutional AUM trend on account of foreign exchange fluctuations has resulted in reduced fees. Also, revenues remain soft, primarily due to disposal and restructuring of several related units.
Also, its expense base recorded a CAGR of 19.6% over the last five years (ended 2018). In order to build its segments, the company has been on a hiring spree, which has resulted in increased compensation costs. Thus, continual expense rise exposes it to operational risks, which is likely to impact bottom-line growth.
Stocks to Consider
Eaton Vance Corporation EV has witnessed 1.2% upward estimate revision over the past 30 days. Also, the company’s shares have rallied nearly 14% in the past three months. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here..
The Goldman Sachs Group’s GS Zacks Consensus Estimate for current-year earnings has been revised slightly upward over the past 30 days. Also, the company’s shares have jumped nearly 15% in the past three months. It currently carries a Zacks Rank #2.
Manning & Napier MN earnings estimates for the current year have remained stable over the past 30 days. Also, the company’s shares have risen nearly 18% in the past three months. It also carries a Zacks Rank of 2.
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Evercore Inc (EVR) : Free Stock Analysis Report
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