NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and notable return on equity. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.
Highlights from the ratings report include:
- The gross profit margin for LAZARD LTD is rather low; currently it is at 22.60%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 11.90% trails that of the industry average.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 2.9%. Since the same quarter one year prior, revenues slightly dropped by 0.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 264.0% when compared to the same quarter one year prior, rising from -$33.53 million to $55.01 million.
- LAZARD LTD reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, LAZARD LTD turned its bottom line around by earning $1.29 versus -$1.66 in the prior year. This year, the market expects an improvement in earnings ($2.50 versus $1.29).
Lazard Ltd., together with its subsidiaries, operates as a financial advisory and asset management firm. The company has a P/E ratio of 27.2, above the average financial services industry P/E ratio of 18.2 and above the S&P 500 P/E ratio of 17.7. Lazard has a market cap of $4.6 billion and is part of the
industry. Shares are down 5.8% year to date as of the close of trading on Tuesday.
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