How Will Evercore (EVR) Stock Respond To Acquisition of International Strategy & Investment Group?

NEW YORK (TheStreet) -- Evercore Partners  (EVR) plans to buy research firm International Strategy & Investment Group in what would be the investment bank's biggest acquisition ever, Bloomberg reports.

Evercore will issue 8 million shares, valued at about $436 million, Bloomberg said.

Shares of Evercore closed at $49.99 and are down -8.12% to $50.13 in after-hours trading today.

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Separately, TheStreet Ratings team rates EVERCORE PARTNERS INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate EVERCORE PARTNERS INC (EVR) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income and solid stock price performance. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • EVR's revenue growth has slightly outpaced the industry average of 0.5%. Since the same quarter one year prior, revenues slightly increased by 5.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • EVERCORE PARTNERS INC has improved earnings per share by 34.9% 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. During the past fiscal year, EVERCORE PARTNERS INC increased its bottom line by earning $1.41 versus $0.86 in the prior year. This year, the market expects an improvement in earnings ($2.57 versus $1.41).
  • 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 47.7% when compared to the same quarter one year prior, rising from $16.43 million to $24.27 million.
  • Powered by its strong earnings growth of 34.88% and other important driving factors, this stock has surged by 25.85% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • The gross profit margin for EVERCORE PARTNERS INC is rather low; currently it is at 23.26%. Regardless of EVR's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 10.94% trails the industry average.
  • You can view the full analysis from the report here: EVR Ratings Report
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