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Investing.com - Morgan Stanley (NYSE:MS) upgraded Evercore Partners (NYSE:EVR) from Equalweight to Overweight on Monday, raising its price target to $312.00 from $175.00. According to InvestingPro data, Evercore maintains a "GOOD" financial health score and currently trades near its Fair Value, with a strong return of 27% over the past year.
The investment bank cited Evercore’s significant exposure to large-cap deals, noting that more than 30% of the company’s 2017-19 deal revenues came from transactions valued at over $5 billion, while more than 70% came from deals worth over $1 billion. In 2021, Evercore’s exposure to deals over $5 billion exceeded 40%, while deals over $1 billion represented more than 80% of its business. The company’s strong market position is reflected in its impressive 94% gross profit margin and 27% revenue growth over the last twelve months.
Evercore has maintained its prominence in major transactions this year, advising on three of the top six mergers, according to Morgan Stanley. The firm is expected to benefit significantly from what Morgan Stanley describes as "a more transparent and predictable antitrust approach."
Morgan Stanley also highlighted Evercore’s Private Capital Advisory (PCA) business as a key growth driver, noting that PCA revenues in the first quarter of 2025 led to a 127% earnings per share beat. The investment bank anticipates additional PCA-driven earnings beats in the future.
Evercore’s early entry into the PCA space and investments in talent with "ambitious, creative leadership" have positioned the company to capitalize on structural demand for liquidity and continuation funds, according to Morgan Stanley’s analysis.
In other recent news, Evercore reported its first-quarter 2025 earnings, significantly surpassing analysts’ expectations with an adjusted earnings per share (EPS) of $3.49, compared to the forecasted $2.35. Despite a slight revenue shortfall, the company achieved a 19% year-over-year increase in net revenues, totaling $700 million. Evercore’s strategic talent acquisition and diversified platform contributed to this robust performance, as noted by CEO John Weinberg. Analysts from firms like Citizens and Goldman Sachs expressed interest in Evercore’s backlog strength, particularly in areas such as software and private capital advisory.
The company remains optimistic about its future, despite anticipating market volatility in the upcoming quarters. Evercore’s leadership highlighted the resilience of its global M&A advisory franchise and its strong capabilities in areas like restructuring and private capital advisory. The firm announced significant transactions, including advising Calpine on its $29.1 billion sale to Constellation Energy (NASDAQ:CEG). In addition, Evercore’s private capital advisory business reported a record first quarter, with strong performance in GP-led continuation vehicles.
The company’s strategic hiring continues, with new senior managing directors joining its investment banking practice, indicating a commitment to long-term growth. Evercore’s CFO, Tim Lalonde, also noted that the firm returned $454 million of capital to shareholders in the quarter. Looking ahead, Evercore plans to maintain its focus on talent acquisition and client relationships, while navigating the challenges posed by geopolitical tensions and market uncertainties.
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