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The analysts explained in their research note that they are upgrading the stock as part of their second-quarter M&A preview.
“We have been cautious on LAZ shares for some time given concerns that the street was underestimating both revenue and comp headwinds. However, with shares trading at a steep discount to peers on our normalized ’25 EPS (~8.5x vs. peers ~13x), risk/reward is looking more balanced,” wrote the analysts.
The analysts believe the current valuation gap does not appear to be justified. LAZ shares rose over 2% on Monday, but the stock is down 7% in 2023.
“While we understand concerns on the impact from LAZ’s recently announced headcount reductions on revenues, with our comp analysis suggesting that LAZ will be one of a select few names to reach its targeted comp range by 2025, we believe that it will prove to be a prudent decision in the long run,” they concluded.
