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On Thursday, Citizens JMP analysts maintained a Market Perform rating on Moelis & Company (NYSE:MC) following the financial advisory firm’s first-quarter earnings report. The analysts highlighted that Moelis had a relatively in-line quarter as it entered the second quarter with record pipelines amid elevated uncertainty.
Moelis reported its first-quarter 2025 adjusted diluted earnings per share (EPS) at $0.64, which was slightly below Citizens JMP’s estimate of $0.65 and just above the consensus estimate of $0.59. The company’s revenues reached $307 million, approximately 3% above the analysts’ model and about 2% higher than the Street’s expectations. This marked an approximately 41% increase in revenues compared to the same quarter in the previous year. The revenue composition was roughly two-thirds from mergers and acquisitions (M&A) and one-third from capital markets and restructuring.
The adjusted compensation ratio reported by Moelis was 69.0%, aligning with the expectations set by Citizens JMP. However, the adjusted non-compensation expenses, which amounted to $58 million, were 9% higher than what the analysts had anticipated. This increase was attributed to seasonal items that affected the financial results.
Additionally, Moelis benefited from a tax advantage of approximately $0.28 per share, which was in line with the estimates provided by Citizens JMP. This benefit stemmed from the settlement of share-based awards, which had a positive impact on the company’s earnings for the quarter.
In summary, Moelis & Company’s first-quarter performance demonstrated solid revenue growth compared to the previous year, with a steady compensation ratio and a slight tax benefit. Despite these positive aspects, the elevated non-compensation expenses and the overall uncertainty in the market have led Citizens JMP to reiterate their Market Perform rating on the stock.
In other recent news, Moelis & Company announced a significant increase in its financial performance for the fourth quarter and the full year ending December 31, 2024. The firm reported fourth-quarter revenues of $438.7 million, a 104% increase from the previous year, and full-year revenues of $1,194.5 million. Adjusted revenues for the year were slightly higher at $1,201.5 million, marking a 40% increase. Moelis also increased its quarterly dividend by 8% to $0.65 per share, reflecting strong financial results. In another development, Morgan Stanley (NYSE:MS) downgraded Moelis’ stock rating from Overweight to Underweight and lowered its price target from $100 to $70, citing a reassessment of the company’s earnings sensitivity and compensation ratio. Keefe, Bruyette & Woods, however, raised Moelis’ price target to $92 from $86, maintaining an Outperform rating due to the firm’s significant revenue beat. Moelis also appointed Christopher Callesano as the new Chief Financial Officer, effective March 31, 2025, succeeding Joseph Simon. Additionally, the company granted a $25 million retention award to CEO Ken Moelis to ensure leadership continuity.
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