On Tuesday, JMP Securities adjusted its outlook on Lazard Ltd (NYSE:LAZ), increasing the firm's share price target to $52 from $50, while keeping a Market Outperform rating on the stock. The investment bank's shares are currently seen as an attractive value play, trading at roughly 9.5 times the normalized earnings.
The firm's analysts underscored the proactive approach of Lazard's new CEO, Peter Orszag, in making strategic decisions aimed at enhancing shareholder value. One of the key initiatives mentioned was the company's conversion to a C-Corporation at the start of 2024, a move that has been viewed positively by the market.
In addition to the structural changes, Lazard has made significant efforts to optimize its expense structure to improve long-term profitability. This includes a headcount reduction of approximately 10% that was announced in 2023. Despite these cost-cutting measures, Lazard's business is reported to be performing well as the year 2024 begins.
The analysts pointed out that while Lazard is currently in a "show me" phase, there is potential for a substantial re-rating of the stock as investor sentiment aligns more closely with that of Lazard's peers.
This sentiment shift could have a meaningful impact on the company's valuation, particularly in the context of its asset management business, which is considered to be weighing on the current valuation under its existing structure.
InvestingPro Insights
As Lazard Ltd (NYSE:LAZ) navigates through strategic shifts and market evaluations, real-time data from InvestingPro provides additional context for investors considering the company's stock. Lazard's market capitalization stands at $3.6 billion, reflecting its position in the industry. The company's revenue for the last twelve months as of Q4 2023 was $2.52 billion, with a gross profit margin of a strong 88.08%, indicating efficient management of its cost of goods sold. Despite a recent dip in revenue growth of -9.09%, quarterly figures show a rebound with a 12.45% increase in Q4 2023.
Two InvestingPro Tips highlight Lazard's financial resilience and future prospects. First, Lazard has consistently maintained dividend payments for 20 consecutive years, demonstrating a commitment to returning value to shareholders, which is underscored by a robust dividend yield of 4.85%. Additionally, analysts predict the company will be profitable this year, aligning with the proactive measures taken by Lazard's management.
Investors can delve deeper into Lazard's financials and access a comprehensive set of InvestingPro Tips by visiting https://www.investing.com/pro/LAZ. For those seeking an in-depth analysis, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking access to a total of 7 additional InvestingPro Tips that could further inform investment decisions.
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