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Why Lazard's (LAZ) Stock Still Has More Upside Left

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On Dec 9, 2016, we issued an updated research report on Lazard Ltd. (LAZ - Free Report) . Shares of this financial advisory and asset management firm have gained more than 30% in the last six months, outperforming the 14% growth for the Zacks categorized Investment Management industry. This solid performance was backed by the company’s strength in improving business despite lingering revenue concerns.

Here are the factors that helped the stock to outperform the broader industry so far and should continue to do so:  

First, the company remains focused on cost containment initiatives adopted to enhance its profitability.

Second, Lazard’s consistent efforts toward fortifying its key business segments, driven by a strong team of indigenous professionals in the Financial Advisory segment and diversified assets under management (AUM) mix in the Asset Management segment is commendable. This strengthens its organic growth as reflected by its revenue improvement.

Third, Lazard’s investment strategies in both equities and fixed income segment, across global, local and emerging markets, have resulted in improving its assets under management (AUM). The company witnessed a 12% rise in AUM during the first nine months of 2016. With anticipated improvement in the market conditions, this uptrend in AUM is likely to continue over the coming quarters.

Fourth, over the last 60 days, the company has witnessed upward Zacks Consensus Estimate revision of 4.3% to $2.94 per share for the current year. Driven by strong fundamentals and a favorable Zacks Rank #2 (Buy), momentum in the stock’s performance is expected to continue.

 


 

Key Picks

Woori Bank Co., Ltd. (WF - Free Report) and Virtus Investment Partners, Inc. (VRTS - Free Report) are two better-ranked stocks in the same space, sporting a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for the stock moved upward 52.3% to $5.04 per share and 9.3% to $5.75 per share, respectively, for the current year, over the last 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.

Fifth Street Asset Management Inc. is another stock that holds the same rank as Lazard. The Zacks Consensus Estimate for the stock improved nearly 13% to 71 cents per share for the current year, over the same time frame.

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