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Here's Why You Should Hold on to Evercore (EVR) Stock Now
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Evercore Inc.’s (EVR - Free Report) efforts to boost its client base in advisory solutions and expand geographically will help it to tide the present unfavorable macro-economic backdrop for deal-making. A strong balance sheet is expected to aid capital deployment activities, while rising expenses and volatility of institutional assets under management (AUM) are concerning.
The Zacks Consensus Estimate for the company’s current-year earnings has been revised 6.5% upward over the past 30 days. This reflects that analysts are optimistic regarding its earnings growth potential. Thus, EVR currently carries a Zacks Rank #3 (Hold).
In the past three months, shares of the company have gained 12.8% compared with the industry’s rise of 6.3%.
Image Source: Zacks Investment Research
EVR’s investment banking business’s adjusted net revenues witnessed a compound annual growth rate (CAGR) of 16.8% over the last four years (ended 2021). While the geopolitical, economic and market headwinds resulted in a decline in the first nine months of 2022, the company’s efforts to boost its client base in advisory solutions, diversify revenue sources and geographical expansion efforts will aid revenue growth in the upcoming period.
Also, the company’s robust backlog and business investments will drive the investment banking business’s growth in the upcoming quarters.
Amid an uncertain economic backdrop, EVR’s strong balance sheet is a positive. As of Sep 30, 2022, cash and cash equivalents were $473.1 million, and investment securities and certificates of deposit were $1.3 billion. Moreover, current assets exceeded current liabilities by $1.5 billion as of the same date. Hence, Evercore is less likely to default on interest and debt repayments if the economic situation worsens.
The strong liquidity position also supports Evercore’s commitment to enhancing shareholders’ value, as seen from its involvement in steady capital deployment activities. In the first nine months of 2022, it repurchased 3.9 million shares under its $1.4-billion share buyback program. Further, over the past four years (ended 2021), the annual dividend per share has increased, seeing a CAGR of 11.7%.
However, Evercore’s investment management segment's revenues, which comprise a smaller portion of total revenues, have declined in the first nine months of 2022. Revenue growth has been weak primarily due to the disposal and restructuring of several related units. Further, any falling volatility in institutional AUM trend on account of foreign exchange fluctuations might likely result in reduced fees.
Evercore’s rising cost base is worrisome and will limit bottom-line growth. Expenses witnessed a CAGR of 11.4% over the last five years (ended 2021) on elevated employee compensation and benefits expenses. While expenses declined in the first nine months of 2022, front-office expansion efforts to fill coverage gaps and expand products are likely to increase compensation costs in the upcoming period.
Stocks Worth a Look
A couple of better-ranked stocks from the finance space are Capital Southwest (CSWC - Free Report) and AssetMark Financial (AMK - Free Report) .
The Zacks Consensus Estimate for Capital Southwest’s current fiscal-year earnings has moved 4.3% higher over the past 30 days. In the past month, its shares have rallied 1.9%. Currently, Capital Southwest carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AssetMark Financial currently carries a Zacks Rank #2. Its earnings estimates for the current year have been revised 5.4% upward over the past 30 days. In the past month, its shares have rallied 29.7%.
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Here's Why You Should Hold on to Evercore (EVR) Stock Now
Evercore Inc.’s (EVR - Free Report) efforts to boost its client base in advisory solutions and expand geographically will help it to tide the present unfavorable macro-economic backdrop for deal-making. A strong balance sheet is expected to aid capital deployment activities, while rising expenses and volatility of institutional assets under management (AUM) are concerning.
The Zacks Consensus Estimate for the company’s current-year earnings has been revised 6.5% upward over the past 30 days. This reflects that analysts are optimistic regarding its earnings growth potential. Thus, EVR currently carries a Zacks Rank #3 (Hold).
In the past three months, shares of the company have gained 12.8% compared with the industry’s rise of 6.3%.
Image Source: Zacks Investment Research
EVR’s investment banking business’s adjusted net revenues witnessed a compound annual growth rate (CAGR) of 16.8% over the last four years (ended 2021). While the geopolitical, economic and market headwinds resulted in a decline in the first nine months of 2022, the company’s efforts to boost its client base in advisory solutions, diversify revenue sources and geographical expansion efforts will aid revenue growth in the upcoming period.
Also, the company’s robust backlog and business investments will drive the investment banking business’s growth in the upcoming quarters.
Amid an uncertain economic backdrop, EVR’s strong balance sheet is a positive. As of Sep 30, 2022, cash and cash equivalents were $473.1 million, and investment securities and certificates of deposit were $1.3 billion. Moreover, current assets exceeded current liabilities by $1.5 billion as of the same date. Hence, Evercore is less likely to default on interest and debt repayments if the economic situation worsens.
The strong liquidity position also supports Evercore’s commitment to enhancing shareholders’ value, as seen from its involvement in steady capital deployment activities. In the first nine months of 2022, it repurchased 3.9 million shares under its $1.4-billion share buyback program. Further, over the past four years (ended 2021), the annual dividend per share has increased, seeing a CAGR of 11.7%.
However, Evercore’s investment management segment's revenues, which comprise a smaller portion of total revenues, have declined in the first nine months of 2022. Revenue growth has been weak primarily due to the disposal and restructuring of several related units. Further, any falling volatility in institutional AUM trend on account of foreign exchange fluctuations might likely result in reduced fees.
Evercore’s rising cost base is worrisome and will limit bottom-line growth. Expenses witnessed a CAGR of 11.4% over the last five years (ended 2021) on elevated employee compensation and benefits expenses. While expenses declined in the first nine months of 2022, front-office expansion efforts to fill coverage gaps and expand products are likely to increase compensation costs in the upcoming period.
Stocks Worth a Look
A couple of better-ranked stocks from the finance space are Capital Southwest (CSWC - Free Report) and AssetMark Financial (AMK - Free Report) .
The Zacks Consensus Estimate for Capital Southwest’s current fiscal-year earnings has moved 4.3% higher over the past 30 days. In the past month, its shares have rallied 1.9%. Currently, Capital Southwest carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AssetMark Financial currently carries a Zacks Rank #2. Its earnings estimates for the current year have been revised 5.4% upward over the past 30 days. In the past month, its shares have rallied 29.7%.