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Here's Why it is Wise to Hold Lazard (LAZ) Stock for Now
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In the Q2 earnings season, the Finance sector was one of the best performers. Though uncertainty over further interest rate hikes on mixed U.S. economic data and increasing signals of rising political commotion are perceived, we can still hold some of the banking stocks in our basket, based on strong fundamentals and solid long-term growth opportunity.
Lazard Ltd. (LAZ - Free Report) is one such stock. While the investment manager’s significant dependence on global markets remains a headwind, its consistent organic growth and cost-management initiatives are expected to be key drivers over the long run.
The company’s robust fundamentals have contributed to 18.4% gain in share price over the last year compared with 22% growth recorded by the industry.
Moreover, the company’s Zacks Consensus Estimate for earnings has been revised around 1% upward for the current year, over the last 90 days. It carries a Zacks Rank #3 (Hold).
Organic growth remains a key strength at Lazard, as highlighted by its revenue growth trend. Though operating revenues descended just 2% year over year in 2016, the figure witnessed a CAGR of 6.8% over the five-year period (2011-2015), with the increasing trend continuing in the first half of 2017. Notably, in September 2016, Lazard expanded its financial advisory in North America, with the acquisition of Canada-based Verus Partners, an independent boutique. Additionally, in October 2016, the company acquired its remaining 50% stake in MBA Lazard, its financial advisory business in Latin America, to strengthen its operations in Latin America, as well as global markets.
Lazard has been diligently working on its cost-containment measures. In 2012, the company announced cost-reduction initiatives for which the full impact of the savings was reflected in 2014 with the positive impact continuing in the current year as well. Further, the company’s investment strategies in global, local and emerging markets in both equities and fixed income boosted its AUM. The increasing trend continued in the first half of 2017 and is expected to go ahead in the upcoming quarters as well, with anticipated improvement in the market.
However, the investment manager’s heavy reliance on overseas revenues, which account for nearly 43% of total operating revenues, remains a concern. A plethora of risks stemming from the regulatory and political environment, foreign exchange fluctuations and performance of regional economy can adversely affect the top line.
Stocks to Consider
BancFirst Corporation (BANF - Free Report) has been witnessing upward estimate revisions for the last 60 days. Additionally, the stock jumped more than 24.1% over the past six months. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
For the past 60 days, Och-Ziff Capital Management Group LLC has been witnessing upward estimate revisions. Also, the company’s shares have risen nearly 19% over the last six months. It flaunts a Zacks Rank #1, at present.
The PNC Financial Services Group, Inc. (PNC - Free Report) has been witnessing upward estimate revisions for the last 60 days. Over the last six months, the company’s share price has been up more than 12%. It carries a Zacks Rank #2 (Buy).
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Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
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Here's Why it is Wise to Hold Lazard (LAZ) Stock for Now
In the Q2 earnings season, the Finance sector was one of the best performers. Though uncertainty over further interest rate hikes on mixed U.S. economic data and increasing signals of rising political commotion are perceived, we can still hold some of the banking stocks in our basket, based on strong fundamentals and solid long-term growth opportunity.
Lazard Ltd. (LAZ - Free Report) is one such stock. While the investment manager’s significant dependence on global markets remains a headwind, its consistent organic growth and cost-management initiatives are expected to be key drivers over the long run.
The company’s robust fundamentals have contributed to 18.4% gain in share price over the last year compared with 22% growth recorded by the industry.
Moreover, the company’s Zacks Consensus Estimate for earnings has been revised around 1% upward for the current year, over the last 90 days. It carries a Zacks Rank #3 (Hold).
Organic growth remains a key strength at Lazard, as highlighted by its revenue growth trend. Though operating revenues descended just 2% year over year in 2016, the figure witnessed a CAGR of 6.8% over the five-year period (2011-2015), with the increasing trend continuing in the first half of 2017. Notably, in September 2016, Lazard expanded its financial advisory in North America, with the acquisition of Canada-based Verus Partners, an independent boutique. Additionally, in October 2016, the company acquired its remaining 50% stake in MBA Lazard, its financial advisory business in Latin America, to strengthen its operations in Latin America, as well as global markets.
Lazard has been diligently working on its cost-containment measures. In 2012, the company announced cost-reduction initiatives for which the full impact of the savings was reflected in 2014 with the positive impact continuing in the current year as well. Further, the company’s investment strategies in global, local and emerging markets in both equities and fixed income boosted its AUM. The increasing trend continued in the first half of 2017 and is expected to go ahead in the upcoming quarters as well, with anticipated improvement in the market.
However, the investment manager’s heavy reliance on overseas revenues, which account for nearly 43% of total operating revenues, remains a concern. A plethora of risks stemming from the regulatory and political environment, foreign exchange fluctuations and performance of regional economy can adversely affect the top line.
Stocks to Consider
BancFirst Corporation (BANF - Free Report) has been witnessing upward estimate revisions for the last 60 days. Additionally, the stock jumped more than 24.1% over the past six months. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
For the past 60 days, Och-Ziff Capital Management Group LLC has been witnessing upward estimate revisions. Also, the company’s shares have risen nearly 19% over the last six months. It flaunts a Zacks Rank #1, at present.
The PNC Financial Services Group, Inc. (PNC - Free Report) has been witnessing upward estimate revisions for the last 60 days. Over the last six months, the company’s share price has been up more than 12%. It carries a Zacks Rank #2 (Buy).
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>