Send me real-time posts from this site at my email
Zacks

Evercore (EVR) Stock Gains 4% as Q4 Earnings Beat Estimates

Evercore EVR shares gained 4% in the afterhours trading session in response to better-than-expected fourth-quarter 2020 results. Adjusted earnings per share of $5.67 handily surpassed the Zacks Consensus Estimate of $2.29. Also, the bottom line was up from the prior-year quarter’s $2.72 per share.

Impressive revenue growth with support from higher underwriting and advisory fees supported the results. Also, rise in assets under management (AUM) was a tailwind. In addition, liquidity position was consistently strong. However, escalating expenses was a major drag.

After considering certain one-time items, on a GAAP basis, net income available to common shareholders was $220.4 million or $5.02 per share compared with the $105.2 million or $2.48 per share reported in the year-ago quarter.

In 2020, adjusted earnings of $9.62 per share beat the consensus estimate of $6.15 and rose 25% year over year. Net income available to common shareholders of $459.6 million climbed 23% from 2019.

Revenues Climb, Expenses Increase

In 2020, net revenues climbed nearly 13% year over year to $2.26 billion. Also, the top line surpassed the consensus estimate of $1.94 billion.

Net revenues remained flat year over year at $927.3 million in the reported quarter. Jump in underwriting fees and advisory fees led to rise. The figure surpassed the Zacks Consensus Estimate of $581.3 million. On an adjusted basis, net revenues were $969.9 million, up 45%.

Total expenses flared up 19.3% to $600.6 million from the prior-year quarter. This upswing mainly stemmed from rise in employee compensation and benefits expenses.

Adjusted compensation ratio was 53.9%, up from the year-earlier quarter’s 52.4%.

Adjusted operating margin came in at 36.4% compared with the prior-year quarter’s 38.9%.

Quarterly Segment Performance (Adjusted)

Investment Banking: Net revenues increased 46% year over year to $948.9 million. Also, operating income rose considerably to $369.3 million. Advisory client transactions were 324,000, up 15%. Notably, underwriting revenues of $95 million in the quarter more than doubled from the prior-year period.

Investment Management: Net revenues were $21 million, up 20% from the prior-year quarter. Operating income was $7 million, up 38%. Additionally, AUM of $10.1 million was reported in the fourth quarter, down 5%. 

Balance-Sheet Position

As of Dec 31, 2020, cash and cash equivalents were $829.6 million and marketable and investment securities totaled $1.1 billion. Moreover, current assets exceeded current liabilities by $1.3 billion as of the same date.

Our Viewpoint

Evercore displayed an impressive performance during the fourth quarter. Its top-line strength displays earnings stability. Apart from this, the company’s strategic initiatives to bolster its investment banking segment bode well. Though escalating expenses are a concern, it is well poised to undertake any opportunistic expansion given its sound liquidity position.

Evercore Inc Price, Consensus and EPS Surprise

Evercore Inc price-consensus-eps-surprise-chart | Evercore Inc Quote

Currently, Evercore flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Performance of Other Banks

Morgan Stanley’s MS fourth-quarter 2020 adjusted earnings of $1.92 per share easily outpaced the Zacks Consensus Estimate of $1.29. Also, the bottom line improved 48% from the year-ago quarter.

Interactive Brokers Group’s IBKR fourth-quarter 2020 adjusted earnings per share of 69 cents outpaced the Zacks Consensus Estimate of 59 cents. Also, the bottom line reflects growth of 19% on a year-over-year basis.

Charles Schwab’s SCHW fourth-quarter 2020 adjusted earnings of 74 cents per share beat the Zacks Consensus Estimate of 70 cents. Also, the bottom line grew 17% from the prior-year quarter, as the company reported first full-quarter results after closing TD Ameritrade deal in October 2020.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Interactive Brokers Group, Inc. (IBKR): Get Free Report
 
The Charles Schwab Corporation (SCHW): Free Stock Analysis Report
 
Morgan Stanley (MS): Get Free Report
 
Evercore Inc (EVR): Get Free Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue