Lazard Q2 adjusted EPS misses estimates,  hurt by high tax rates

Overview

• Financial advisory and asset manager's Q2 revenue rose 1% yr/yr, beating analyst expectations

• Adjusted EPS for Q2 missed analyst expectations

• Company on July 22 authorized additional $200 mln in share repurchases, total authorization now $257 mln

Outlook

• Lazard aims for an adjusted compensation ratio of 60% or below, timing dependent on market conditions

• Company targets adjusted non-compensation ratio between 16% to 20%, timing dependent on market conditions

Result Drivers

• ASSET MANAGEMENT GROWTH - Asset Management revenue rose 20% yr/yr, with record AUM and higher management fees driven by market appreciation and net inflows

• ADVISORY REVENUE DECLINE - Financial Advisory revenue fell 9% yr/yr, reflecting lower deal activity or volumes

• HIGH TAX RATE - Q2 earnings were impacted by an elevated effective tax rate, which the company said was not indicative of the full-year rate

Company press release: ID:nPn3P7ghla

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 4 "strong buy" or "buy", 5 "hold" and 2 "sell" or "strong sell"

• The average consensus recommendation for the investment management fund operators peer group is "buy."

• Wall Street's median 12-month price target for Lazard Inc is $47.50, about 9% above its July 22 closing price of $43.58

• The stock recently traded at 11 times the next 12-month earnings vs. a P/E of 11 three months ago

Reuters Recommended Reads

• July 22 - Stifel Q2 revenue beats estimates on investment banking strength

• July 22 - Raymond James Q3 profit beats estimates on higher asset management fees

• July 23 - Jupiter Fund's first-half pre-tax profit rises on strong inflows

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)