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Wall Street Dealings Point to a Buying Opportunity in Lazard, says Morgan Stanley
Increasing M&A Activity Indicates a Promising Outlook for Lazard
Morgan Stanley analyst Ryan Kenny has upgraded financial advisory firm Lazard to overweight from equal weight, signaling a potential buying opportunity. Kenny's upgrade comes as capital markets show signs of improvement, leading to a more positive outlook for mergers and acquisitions in the future. He believes that now is the time to be proactive and take advantage of this positive trend. Kenny also raised his price target for Lazard, expecting the stock to experience significant growth.
Potential Rebound for Lazard
Although Lazard's shares have underperformed this year, down more than 1%, Kenny predicts a turnaround for the asset management firm. As concerns around bank failures and macroeconomic shocks decrease, Lazard is well-positioned to benefit from a stabilizing market. With the Federal Reserve pausing interest rate hikes, Kenny sees Lazard as the least priced for a rebound. He notes that the stock is trading at a significant discount compared to its peers, presenting an attractive investment opportunity.
Strategic Positioning and Favorable Valuation
Lazard's strategic position in the market and its favorable valuation make it an appealing investment option. Kenny points out that the company is trading at a PE multiple of 7.7x 2024 PE, which is four turns below its 2017-19 average. When assuming that M&A as a percentage of Nominal GDP returns to trend, Lazard's valuation becomes even more attractive. This discount is greater than that of other firms in the industry, making Lazard a compelling choice for investors.
How the "Buying Opportunity" in Lazard Impacts New Businesses
The recent Wall Street dealings pointing to a buying opportunity in Lazard, as highlighted by Morgan Stanley, have wider implications beyond the scope of existing investors. This development can have a considerable impact on new businesses, particularly those seeking financial advisory services or exploring merger and acquisition (M&A) opportunities.
The upgraded rating of Lazard by Morgan Stanley, along with the promising outlook for M&A activity, suggests that the economic climate is expected to be more conducive to business consolidation and expansion. For new businesses, this indicates a potential increase in opportunities for strategic partnerships, acquisitions, or attracting investment through mergers.
As Lazard positions itself to benefit from a stabilizing market, it is likely to become a key player in facilitating and advising on such deals. Therefore, new businesses looking to explore growth through strategic partnerships or acquisitions may find Lazard's expertise and favorable valuation particularly attractive. The company's strategic positioning and reputation in the financial advisory sector can provide new businesses with crucial guidance and support in navigating the complex world of M&A.
Moreover, Lazard's discounted valuation compared to its peers enhances its appeal as an investment option for new businesses seeking potential synergy with a trusted and experienced financial partner. By aligning with Lazard during a period of expected growth, new businesses can gain access to valuable market insights and industry networks, enhancing their chances of success in a competitive landscape.
In conclusion, the buying opportunity in Lazard highlighted by Morgan Stanley can significantly impact new businesses by presenting them with a favorable environment for strategic partnerships, acquisitions, and merger opportunities. Leveraging Lazard's expertise and attractive valuation can empower emerging businesses to navigate the complexities of the financial landscape, increasing their chances of long-term viability and growth.
Article First Published at: https://www.cnbc.com/2023/07/12/dealmaking-is-set-to-return-to-wall-street-soon-and-morgan-stanley-says-you-should-buy-this-stock-now-to-benefit.html
