Deutsche Bank initiates Houlihan Lokey stock with Hold rating, $210 target

Investing.com - Deutsche Bank initiated coverage on Houlihan Lokey (NYSE:HLI) with a Hold rating and a $210.00 price target on Thursday. The investment banking firm, currently valued at $13.45 billion, has shown strong revenue growth of 23.3% over the last twelve months.

The investment bank views Houlihan Lokey as having a "well-diversified and defensible business model" but notes that shares already trade at a significant premium to peers, reflecting these strengths. According to InvestingPro data, the stock trades at a P/E ratio of 32.31 and appears overvalued based on its Fair Value analysis, despite maintaining strong financial health metrics.

Deutsche Bank believes pro-cyclical peers with greater exposure to large-cap mergers and acquisitions will offer more significant upside potential in the accelerating M&A cycle.

The bank cites Houlihan Lokey’s limited involvement in big-ticket deals as a factor that could temper earnings growth during bull markets.

Houlihan Lokey’s higher revenue share from less cyclical segments, including Restructuring and Valuation Advisory, historically moderates EPS growth compared to peers more focused on large-scale M&A activity.

In other recent news, Houlihan Lokey reported impressive financial results for its first fiscal quarter of 2026, with an adjusted earnings per share (EPS) of $2.14, surpassing the forecast of $1.68 by 27.38%. In another development, BMO Capital initiated coverage on Houlihan Lokey with an Outperform rating, setting a price target of $230.00. The firm highlighted Houlihan Lokey’s strong position in the middle-market M&A and restructuring sectors. Additionally, Houlihan Lokey announced the appointment of R. Scott Mund as an independent Class II director, expanding its board from ten to eleven members. Mund will also serve on the Nominating and Corporate Governance Committee until the 2026 Annual Meeting of Stockholders. The company further strengthened its team by appointing John Guzzo as Managing Director in its Financial Services Group, where he will enhance the firm’s Mortgage Services practice. Lastly, creditors to Altice International selected Houlihan Lokey as their financial adviser for upcoming debt negotiations, although the formal appointment is still pending.

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