Yahoo Finance Why Is Evercore (EVR) Up 9% Since Last Earnings Report?
A month has gone by since the last earnings report for Evercore (EVR). Shares have added about 9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Evercore due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Evercore Q1 Earnings Miss Estimates, Revenues Rise Y/Y
Evercore’s adjusted earnings per share of $2.13 missed the Zacks Consensus Estimate of $2.20. The bottom line compared unfavorably with earnings of $2.16 per share reported a year ago.
Results were affected due to a rise in expenses. Nonetheless, an increase in revenues generated from the Investment Management and Investment Banking & Equities segments offered support. Further, an improvement in AUM balance was another positive.
Net income available to common shareholders (GAAP basis) was $85.7 million, up 2.8% from the year-ago quarter.
Revenues & Expenses Rise
In first-quarter 2024, total revenues of $585 million missed the Zacks Consensus Estimate of $652.7 million. Nonetheless, the top line increased 1.5% year over year.
On an adjusted basis, net revenues came in at $587.3 million, up 1.7% year over year.
Total expenses increased 6.8% to $496.7 million. This was mainly due to a rise in almost all the components of total expenses, except depreciation and amortization costs, special charges, including business realignment costs and other operating expenses.
The adjusted compensation ratio was 66%, up from the prior-year quarter’s 63.5%.
Adjusted operating margin was 15.4%, down from the prior-year quarter’s 20%.
Quarterly Segmental Performance (GAAP Basis)
Investment Banking & Equities: Net revenues increased 1.2% year over year to $561.7 million. However, operating income decreased 23.3% to $78.9 million.
Investment Management: Net revenues were $19.1 million, up 10.1% from the prior-year quarter’s reported figure. Operating income was $5.2 million, up 27.7% from the year-ago quarter. AUM was $13 billion as of Mar 31, 2024, up 18% year over year.
Balance Sheet Position
As of Mar 31, 2024, cash and cash equivalents were $569.8 million and investment securities and certificates of deposit were $865.3 million. Moreover, current assets exceeded current liabilities by $1.5 billion as of the same date.
Share Repurchase Activities
In the first quarter of 2024, Evercore repurchased 1.5 million shares at an average price of $177.04.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -21.43% due to these changes.
VGM Scores
At this time, Evercore has a poor Growth Score of F, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Evercore has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Evercore belongs to the Zacks Financial - Investment Bank industry. Another stock from the same industry, Morgan Stanley (MS), has gained 6.9% over the past month. More than a month has passed since the company reported results for the quarter ended March 2024.
Morgan Stanley reported revenues of $15.14 billion in the last reported quarter, representing a year-over-year change of +4.3%. EPS of $2.02 for the same period compares with $1.70 a year ago.
Morgan Stanley is expected to post earnings of $1.66 per share for the current quarter, representing a year-over-year change of +33.9%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.4%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #1 (Strong Buy) for Morgan Stanley. Also, the stock has a VGM Score of F.
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