Evercore: High Quality Stock with Room to Run

Investment banking advisory firm Evercore Inc. (EVR) reported revenue growth across its segments in the last quarter. In addition, the company expects its revenue to soar over the next few years. So read on for details on why we think it’s wise to add stocks to one’s portfolio now.

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Evercore Inc. based in New York City (EVR) is the world’s leading independent investment banking advisory firm. It helps clients raise public and private capital, provides equity research, equity sales, agency trade execution, and provides wealth management and investment services to institutional and high net worth investors.

In its recent quarterly earnings release, the company reported strong financial performance. Its asset management and administration fees increased $3.0 million, or 21%, year over year, due to increased fees from wealth management clients.

In addition, commissions and related revenues increased or 4% from the previous year’s quarter, primarily reflecting higher revenues from research subscriptions and convertible securities.

Here’s what could shape EVR’s performance in the near future:

Share Buy Back

Last month, EVR’s board of directors approved a share buyback program of up to $1.4 billion or 10 million shares of Evercore Inc. common stock. Class A and Evercore LP Units. This authorization underscores Evercore’s ongoing commitment to its payback goals, including balancing dilution of the annual bonus equity and new lease grants through share repurchases and returning excess cash not required for business expansion through share repurchases.

Strong Finance

During the fourth quarter, ending December 31, 2021, EVR’s net revenue increased 20.3% year-on-year to $1.12 billion. His operating income increased 39.6% year on year to $456.1 million. And the company’s net profit grew 34.3% from last year’s value to $295.86 million, while its EPS grew 38.6% from the previous year’s quarter to $6.96.

Strong Profitability

The 97.2% trailing 12-month gross profit margin EVR was 54.1% higher than the industry average of 63.1%. Also, the asset turnover ratio and ROA are 330.3% and 1350.4% higher than the industry averages respectively. Furthermore, the $1.38 billion in cash from operations was 882.7% higher than the industry average of $140.92 million.

Consensus Ratings and Price Targets Show Upgrading Potential

Of the seven Wall Street analysts who rated EVR, three rated it Buy, and four rated it Hold. The 12-month average price target of $160.5 shows a 45.4% upside potential. Price targets range from as low as $141.00 to as high as $180.00.

POWR Rating Reflects Strong Prospect

EVR has an overall B rating, which is equivalent to a Buy rating in our holdings POWRA Rating system. The POWR rating is calculated taking into account 118 different factors, with each factor being weighted to an optimal level.

Our ownership rating system also evaluates each stock according to eight different categories. EVR has an A for Quality. EVR’s solid revenue and revenue growth is consistent with Quality levels.

Among the 22 stocks rated B Investment Broker industry, EVR is ranked #5.

Beyond what I stated above, we have rated MU for Sentiment, Stability, Growth, Value and Momentum. Get all EVR ratings here.

Note that EVR is one of the few stocks handpicked by our Chief Value Strategist, Steve Reitmeister, currently in the POWR Value portfolio. Learn more here.

The main thing is

EVR has seen a 57% year-over-year growth in advisory revenue, exceeding $2.7 billion for the first time in the company’s history. Moreover, given the favorable analyst sentiment and the firm’s fundamental strength, the stock could provide solid gains in the near term. So, we think stocks could be a good bet now.

How Evercore Inc. (EVR) Defend Against His Comrades?

EVR has an overall POWR B Rating, which is equivalent to a Buy rating. Check out these other stocks in the Investment Brokers industry: Manning & Napier Inc. (M N), which has an A rating (Strong Buy), and Piper Sandler Companies (PIPR), and Houlihan Lokey Inc. (HLI), which has a rating of B (BUY).

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EVR shares were unchanged in Tuesday’s premarket trading. This year, the EVR has declined -18.30%, versus the -11.69% gain in the benchmark S&P 500 index over the same period.

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About the Author: Pragya Pandey

Pragya is an equity research analyst and financial journalist with a passion for investing. In college he majored in finance and is currently pursuing a CFA program and is a Level II candidate.

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