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Bear Of The Day: Lazard (LAZ)

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Lazard (LAZ - Free Report) is a Zacks Rank #5 (Strong Sell) and it is the Bear of the Day.  Often times, the Bear of the Day will be a stock that is falling, but that is not happening with LAZ.  Let's look at why this is the case, and why the stock has the lowest Zacks Rank.

Description

Lazard is one of the world’s major financial advisory and asset management firms. The company is specialized in offering solutions for complex financial and strategic challenges of a diverse set of clients around the world, including corporations, governments, institutions, partnerships and individuals. Founded in 1848 in New Orleans, Lazard currently operates from 43 cities in key business and financial centers across 27 countries throughout Europe, North America, Asia, Australia, the Middle East, and Central and South America.

Estimates Falling

Lazard is not in trouble by any means, but the key idea here is that the Zacks Rank is all about earnings estimate revisions.  That means if the analysts see some trouble ahead they are going to lower their estiamtes.  They might also just be correcting their models as they were too bullish.

In any event, esimates for LAZ are falling.

60 days ago, the full year number for 2019 was $3.35, now that number is $3.23.  

Next year has seen an even bigger decline, as estimates have fallen from $3.95 to $3.56.

It really speaks to the broader market when a move like that is causing the stock to fall to a Zacks Rank #5 (Strong Sell).  It says that there are a lot of stocks with positive earnings estimate revisions and only a small move lower brought this stock to the lowest Zacks Rank.

Valuation

I see a 12x forward earnings multiple which is good, but a 6x price to book is a little stiff.  1.5x sales is a good level to have, but with revenue contracting you have to look for margins to expand.  Lately, margins have not been expanding, so when they turn around, this stock could be worth a deeper look.

Chart

 

Lazard Ltd Price and Consensus

Lazard Ltd Price and Consensus

Lazard Ltd price-consensus-chart | Lazard Ltd Quote

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