Houlihan Lokey stock price target raised to $192 at KBW

On Wednesday, Keefe, Bruyette & Woods (KBW) responded to Houlihan Lokey’s (NYSE:HLI) recent financial performance by increasing the investment bank’s price target from $170.00 to $192.00. The firm maintained a Market Perform rating on the stock.

The upgrade reflects Houlihan Lokey’s impressive quarter, driven mainly by its Corporate Finance division. The company’s strong performance is evident in its 18.82% revenue growth and remarkable 93.7% gross profit margin, as reported by InvestingPro. The Restructuring segment’s performance was slightly below KBW’s expectations, while Financial Valuation and Advisory (FVA) services were aligned with projections. According to the analyst from KBW, the company experienced a broad-based Corporate Finance activity during the quarter, which is expected to continue with building momentum across the platform.

KBW highlighted the strength in Houlihan Lokey’s Restructuring activities, noting that the company’s backlog remains high due to new business offsetting the year-to-date results. This robust activity has prompted KBW to raise forward estimates for the company.

The analyst’s statement underscored the positive outlook for Houlihan Lokey, with the expectation of sustained performance based on the quarterly results. Despite the price target increase, KBW reiterated its Market Perform rating, suggesting that the stock is expected to perform in line with the overall market.

Investors in Houlihan Lokey can look to the company’s recent financial results as an indicator of its potential trajectory, with the raised price target providing a new benchmark for market expectations.

In other recent news, Houlihan Lokey has made significant strides in its operations. The company reported a robust performance in its second quarter earnings for fiscal year 2025, with revenues reaching $575 million, a 23% increase year-over-year, while adjusted earnings per share (EPS) rose by 32% to $1.46. Seaport Global Securities maintained a Neutral rating on Houlihan Lokey, highlighting an increase in FY2025E/FY2026E EPS to $5.75/$6.60 from $5.50/$6.40.

In addition to this, the company has been actively involved in mergers and acquisitions, recently acquiring Waller Helms Advisors in a deal involving the issuance of 635,834 shares of Houlihan Lokey’s Class B common stock. This acquisition aligns with Houlihan Lokey’s strategy to enhance its advisory services and is expected to bolster the firm’s expertise in the financial sector.

Further, Houlihan Lokey has appointed Brad Boggess, a former Blackstone (NYSE:BX) executive, as a Managing Director in its Capital Markets Group. This appointment is expected to enhance the firm’s services through Boggess’s extensive operational expertise and relationships with private equity and private credit managers.

These recent developments indicate Houlihan Lokey’s continued commitment to growth and operational efficiency, as noted by analysts from Seaport Global Securities. The analysts anticipate ongoing strength in the company’s restructuring activities and expect the capital markets business to contribute 15% to 20% of Corporate Finance revenues. Despite macroeconomic challenges, Houlihan Lokey maintains a robust M&A pipeline and is well-positioned for continued growth in the coming quarters.

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