Lazard Soars 42.7% in a Year: How Should You Play the Stock Now?

Core Viewpoint - Lazard, Inc. (LAZ) has experienced a significant share price increase of 42.7% over the past year, outperforming the industry growth of 20.8% and the S&P 500 Index's 22.7% rise [1] Performance Summary - LAZ's peers, Brookfield Asset Management Inc. (BAM) and Burford Capital Limited (BUR), have shown varied performance, with BAM gaining 47.7% and BUR declining by 1.9% [1] Factors Driving Growth - The revival of deal-making activities, supported by favorable policies and a stabilizing macroeconomic environment, is expected to enhance M&A activities, benefiting LAZ's top line [5][6] - Lazard's diversified Asset Under Management (AUM) mix is anticipated to drive overall revenue growth [6] - Recent acquisitions, including Truvvo Partners with $3.8 billion in AUM, are expected to contribute positively to revenue [8] - The establishment of Lazard Elaia Capital aims to launch a growth capital fund focused on private companies in the technology sector, aligning with Lazard's long-term strategy [9] Financial Position - As of December 31, 2024, Lazard held senior debt of$1.69 billion and maintained investment-grade credit ratings, providing access to favorable debt market conditions [10] - The company reported cash and cash equivalents of $1.31 billion and$200 million available under its credit facility, indicating decent financial flexibility [11] Long-term Goals - Lazard aims to double its revenues by 2030, driven by its Asset Management and Advisory segments, with an expected total shareholder return of 10-15% per year through 2030 [12] Challenges - The company has faced significant net outflows, particularly in the equity asset class, with $35.7 billion in outflows reported in 2024 [14] - Financial Advisory revenues, which contributed 59.9$3.21 billion, with a year-over-year growth estimate of 11.08% [21] - Earnings per share (EPS) estimates for 2025 are projected at $4.24, reflecting a year-over-year growth of 81.20% [23]