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Evercore (EVR) Stock Dips 4.9% as Q1 Earnings Miss Estimates
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Evercore Inc.’s (EVR - Free Report) shares lost 4.9% following the release of its lower-than-expected first-quarter 2024 results. Adjusted earnings per share of $2.13 missed the Zacks Consensus Estimate of $2.20. The bottom line compared unfavorably with earnings of $2.16 per share reported a year ago.
Results were affected due to a rise in expenses. Nonetheless, an increase in revenues generated from the Investment Management and Investment Banking & Equities segments offered support. Further, an improvement in assets under management (AUM) balance was another positive.
Net income available to common shareholders (GAAP basis) was $85.7 million, up 2.8% from the year-ago quarter.
Revenues & Expenses Rise
In first-quarter 2024, total revenues of $585 million missed the Zacks Consensus Estimate of $652.7 million. Nonetheless, the top line increased 1.5% year over year.
On an adjusted basis, net revenues came in at $587.3 million, up 1.7% year over year.
Total expenses increased 6.8% to $496.7 million. This was mainly due to a rise in almost all the components of total expenses, except depreciation and amortization costs, special charges, including business realignment costs and other operating expenses.
Adjusted compensation ratio was 66%, up from the prior-year quarter’s 63.5%.
Adjusted operating margin was 15.4%, down from the prior-year quarter’s 20%.
Quarterly Segmental Performance (GAAP Basis)
Investment Banking & Equities: Net revenues increased 1.2% year over year to $561.7 million. However, operating income decreased 23.3% to $78.9 million.
Investment Management: Net revenues were $19.1 million, up 10.1% from the prior-year quarter’s reported figure. Operating income was $5.2 million, up 27.7% from the year-ago quarter. AUM was $13 billion as of Mar 31, 2024, up 18% year over year.
Balance Sheet Position
As of Mar 31, 2024, cash and cash equivalents were $569.8 million and investment securities and certificates of deposit were $865.3 million. Moreover, current assets exceeded current liabilities by $1.5 billion as of the same date.
Capital Distributions Activities
The company declared a quarterly dividend of 80 cents per share, marking a sequential increase of 5%. The dividend will be paid on Jun 14, 2024, to common stockholders on record as of May 31.
In the first quarter of 2024, Evercore repurchased 1.5 million shares at an average price of $177.04.
Our Viewpoint
The company's focus on boosting its client base in advisory services has contributed to its revenue growth. Given Evercore’s decent liquidity position, capital distribution activities seem sustainable. However, a rising expense base is a near-term concern.
The Goldman Sachs Group, Inc.’s (GS - Free Report) first-quarter 2024 earnings per share of $11.58 surpassed the Zacks Consensus Estimate of $8.54. Also, the bottom line increased 16.3% from the year-earlier quarter.
Goldman’s results have benefited from the strength in the consumer banking and investment banking business, along with improved fee income. However, increased expenses and provisions were the undermining factors.
Morgan Stanley’s (MS - Free Report) first-quarter 2024 earnings of $2.02 per share handily surpassed the Zacks Consensus Estimate of $1.69. The figure also compared favorably with $1.70 per share reported in the prior-year quarter.
Additionally, MS’ net revenues of $15.14 billion beat the Zacks Consensus Estimate of $14.47 billion. The top line grew 4% year over year.
The primary reason for Morgan Stanley’s better-than-expected performance was the resurgence of the investment banking (IB) business. Since 2022, the performance of the IB business has been subdued because of a host of factors, including high inflation, central banks’ monetary tightening policy and geopolitical tension, among others.
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Evercore (EVR) Stock Dips 4.9% as Q1 Earnings Miss Estimates
Evercore Inc.’s (EVR - Free Report) shares lost 4.9% following the release of its lower-than-expected first-quarter 2024 results. Adjusted earnings per share of $2.13 missed the Zacks Consensus Estimate of $2.20. The bottom line compared unfavorably with earnings of $2.16 per share reported a year ago.
Results were affected due to a rise in expenses. Nonetheless, an increase in revenues generated from the Investment Management and Investment Banking & Equities segments offered support. Further, an improvement in assets under management (AUM) balance was another positive.
Net income available to common shareholders (GAAP basis) was $85.7 million, up 2.8% from the year-ago quarter.
Revenues & Expenses Rise
In first-quarter 2024, total revenues of $585 million missed the Zacks Consensus Estimate of $652.7 million. Nonetheless, the top line increased 1.5% year over year.
On an adjusted basis, net revenues came in at $587.3 million, up 1.7% year over year.
Total expenses increased 6.8% to $496.7 million. This was mainly due to a rise in almost all the components of total expenses, except depreciation and amortization costs, special charges, including business realignment costs and other operating expenses.
Adjusted compensation ratio was 66%, up from the prior-year quarter’s 63.5%.
Adjusted operating margin was 15.4%, down from the prior-year quarter’s 20%.
Quarterly Segmental Performance (GAAP Basis)
Investment Banking & Equities: Net revenues increased 1.2% year over year to $561.7 million. However, operating income decreased 23.3% to $78.9 million.
Investment Management: Net revenues were $19.1 million, up 10.1% from the prior-year quarter’s reported figure. Operating income was $5.2 million, up 27.7% from the year-ago quarter. AUM was $13 billion as of Mar 31, 2024, up 18% year over year.
Balance Sheet Position
As of Mar 31, 2024, cash and cash equivalents were $569.8 million and investment securities and certificates of deposit were $865.3 million. Moreover, current assets exceeded current liabilities by $1.5 billion as of the same date.
Capital Distributions Activities
The company declared a quarterly dividend of 80 cents per share, marking a sequential increase of 5%. The dividend will be paid on Jun 14, 2024, to common stockholders on record as of May 31.
In the first quarter of 2024, Evercore repurchased 1.5 million shares at an average price of $177.04.
Our Viewpoint
The company's focus on boosting its client base in advisory services has contributed to its revenue growth. Given Evercore’s decent liquidity position, capital distribution activities seem sustainable. However, a rising expense base is a near-term concern.
Evercore Inc Price, Consensus and EPS Surprise
Evercore Inc price-consensus-eps-surprise-chart | Evercore Inc Quote
Currently, Evercore has a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Peer Performance
The Goldman Sachs Group, Inc.’s (GS - Free Report) first-quarter 2024 earnings per share of $11.58 surpassed the Zacks Consensus Estimate of $8.54. Also, the bottom line increased 16.3% from the year-earlier quarter.
Goldman’s results have benefited from the strength in the consumer banking and investment banking business, along with improved fee income. However, increased expenses and provisions were the undermining factors.
Morgan Stanley’s (MS - Free Report) first-quarter 2024 earnings of $2.02 per share handily surpassed the Zacks Consensus Estimate of $1.69. The figure also compared favorably with $1.70 per share reported in the prior-year quarter.
Additionally, MS’ net revenues of $15.14 billion beat the Zacks Consensus Estimate of $14.47 billion. The top line grew 4% year over year.
The primary reason for Morgan Stanley’s better-than-expected performance was the resurgence of the investment banking (IB) business. Since 2022, the performance of the IB business has been subdued because of a host of factors, including high inflation, central banks’ monetary tightening policy and geopolitical tension, among others.