What Evercore Has to Offer after 9 Years of Revenue Growth

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Part 6
What Evercore Has to Offer after 9 Years of Revenue Growth PART 6 OF 7

Evercore’s Performance Compared to Its Peers

Outstanding performance

Evercore (EVR) stock has risen 24% over the past six months and 20.6% over the past year. The stock has outperformed the broader index (SPX-INDEX), helped by improved operating performance and advisory revenue growth.

Evercore is trying to expand its business across countries and sectors. It has improved its numbers in the past few quarters due to this diversification.

Evercore’s Performance Compared to Its Peers

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Post-romp valuation

The recent fall in the stock market was most likely due to the expectation of interest rate hikes in 2018 as well as higher valuations. The Fed indicated that there may be three or four rate hikes in 2018, but looking at the market reaction, these rate hikes could come more slowly. The current interest rate is 1.5% which could rise to 2.3%–2.5%.

In 4Q17, Evercore saw a net loss of $19.4 million, including a one-time charge of $143.3 million related to the various tax assets under the Tax Cuts and Jobs Act.

In the recent market, banks fell 7%–8%. Evercore is now trading at a price-to-book multiple of 7.68x. The stock is trading at a higher multiple due to its strong operating performance in recent quarters. Below are the multiples for some of its peers:

  • Lazard (LAZ): 4.9x
  • JPMorgan Chase (JPM): 1.7x
  • Goldman Sachs (GS): 1.4x

Expectations for 2018

In 2018, Evercore is expected to post EPS (earnings per share) of $6.77, reflecting a 24% growth. It’s expected to report revenue of $1.7 billion, representing a 7% rise year-over-year due to improving performance in the investment banking department, global banking growth, and trading revenue. Volatility could help Evercore improve its performance in the investment management segment in 2018.


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