Lazard Ltd. (LAZ, Financial) reported first-quarter revenue of $643 million, which fell short of the market consensus of $654.15 million. Despite the revenue miss, the company highlighted strong performance amidst a challenging business landscape.
The firm's assets under management (AUM) at the close of Q1 stood at $227 billion, a decrease from $250 billion the previous year. This decline reflects broader market conditions but doesn't deter Lazard's commitment to its long-term goals.
CEO and Chairman Peter R. Orszag emphasized the company's continued dedication to client service and growth. Lazard is leveraging its extensive global presence and specialized expertise in business and geopolitical intersections to maintain substantial client engagement. The management remains focused on advancing towards the Lazard 2030 growth strategy, aiming for sustainable, long-term expansion.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 7 analysts, the average target price for Lazard Inc (LAZ, Financial) is $41.43 with a high estimate of $55.00 and a low estimate of $33.00. The average target implies an upside of 3.91% from the current price of $39.87. More detailed estimate data can be found on the Lazard Inc (LAZ) Forecast page.
Based on the consensus recommendation from 10 brokerage firms, Lazard Inc's (LAZ, Financial) average brokerage recommendation is currently 2.7, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Lazard Inc (LAZ, Financial) in one year is $37.18, suggesting a downside of 6.75% from the current price of $39.87. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Lazard Inc (LAZ) Summary page.
LAZ Key Business Developments
Release Date: January 30, 2025
- Firm-wide Adjusted Net Revenue: $812 million for Q4, up 7% year-over-year; $2.9 billion for the full year, up 18% from 2023.
- Financial Advisory Adjusted Net Revenue: $508 million for Q4, up 6% year-over-year; $1.7 billion for the full year, up 28% from 2023.
- Asset Management Adjusted Net Revenue: $287 million for Q4, up 5% year-over-year; $1.1 billion for the full year, up 3% from 2023.
- Management Fees: $258 million for Q4; $1.1 billion for the full year, up 2% from the prior year.
- Incentive Fees: $29 million for Q4; $43 million for the full year.
- Assets Under Management (AUM): $226 billion as of December 31, 2024, down 8% from December 2023.
- Adjusted Compensation Expense: $533 million for Q4; $1.9 billion for the full year 2024.
- Compensation Ratio: 65.9% for the full year, improved by 390 basis points from 2023.
- Adjusted Non-Compensation Expense: $154 million for Q4; $575 million for the full year 2024.
- Effective Tax Rate: 18.1% for Q4; 24.4% for the full year 2024.
- Capital Returned to Shareholders: $61 million in Q4; $303 million for the full year 2024.
- Quarterly Dividend: $0.50 per share declared.
- Share Repurchases: 1.4 million shares repurchased at an average price of $42.20 during 2024.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Lazard Inc (LAZ, Financial) reported strong fourth quarter and full year results for 2024, with firm-wide adjusted net revenue up 18% from 2023.
- The Financial Advisory segment achieved record revenue in Europe and demonstrated increased productivity, contributing significantly to the overall revenue growth.
- Asset Management produced consistent results, with growth in incentive fees due to the outperformance of key strategies.
- Lazard Inc (LAZ) entered 2025 with $10 billion in mandates that are won but not yet funded, indicating strong future revenue potential.
- The company is on track to achieve its Managing Director (MD) growth target, with plans to continue investing in talent and increasing MD productivity.
Negative Points
- Asset Management's Assets Under Management (AUM) decreased by 8% from December 2023, with net outflows of $10 billion during the fourth quarter.
- The compensation ratio remains high at 65.9% for 2024, although there is a target to reduce it to 60% by 2025.
- The effective tax rate increased to 24.4% for the full year 2024, compared to the prior year.
- The share count increased nearly 10% in 2024, partly due to elevated amortization and less buyback activity.
- Non-compensation expenses are expected to grow at a mid-single-digit rate in 2025, driven by investments in technology and new buildings.
