On Sep 18, 2013, we upgraded our recommendation on
) to Neutral from Underperform. The upward revision was based on
the company's second-quarter 2013 adjusted earnings, which
significantly surpassed the Zacks Consensus Estimate. Moreover,
results compared favorably with the prior-quarter earnings.
Further, strong top-line growth and ongoing cost-curtailment
initiatives added fuel to the fire.
Lazard is diligently working on its cost-containment measures. In
2012, the company announced cost saving initiatives, which were
expected to record about $125 million in annual savings from its
existing cost base. The company has exceeded its target and now
anticipates total annual savings of about $160 million, partially
offset by investment in business. Moreover, two-third of the
expense savings is anticipated to be realized in 2013, and full
Lazard is an asset for yield-seeking investors due to its strong
capital deployment activity. Since the beginning of 2010, it has
doubled its quarterly dividend and returned more than $1 billion
in capital to shareholders. Moreover, in first-half 2013, the
company returned $230 million to shareholders. These actions are
bound to boost investors' confidence.
At the current level, asset management businesses are under
cyclical and secular pressures, many of which have been
aggravated by the financial crisis. These pressures include
volatile markets and new regulatory restrictions. Though Lazard
remains well positioned over the long term, given the ongoing
macro headwinds, a limited upside is expected in the near term.
For Lazard, the Zacks Consensus Estimate for 2013 increased 3.7%
to $1.70 per share, over the last 60 days. For 2014, the Zacks
Consensus Estimate surged 0.9% to $2.27 per share, over the same
time frame. Currently, Lazard carries a Zacks Rank #3 (Hold).
Other Companies to Consider
Some investment companies that are worth considering include
GAMCO Investors, Inc.
) with a Zacks Rank #1 (Strong Buy) while
Fortress Investment Group LLC
Ameriprise Financial, Inc.
) carry a Zacks Rank #2 (Buy).
AMERIPRISE FINL (AMP): Free Stock Analysis
FORTRESS INVEST (FIG): Free Stock Analysis
GAMCO INVESTORS (GBL): Free Stock Analysis
LAZARD LTD (LAZ): Free Stock Analysis Report
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