Lazard (LAZ) Stock Forecast & Price Target

Lazard Inc. has demonstrated a robust public pipeline, increasing by 8.2% compared to the previous quarter, significantly outperforming the peer average, which declined by 6.7%. The firm also reported a notable uptick in deal sentiment, with year-over-year announcements in Europe rising by 26% and 32% in the U.S. during the third quarter to date, indicating positive trends in both key geographical markets. Additionally, the company is on track to surpass its net annual Managing Director (MD) hiring goal of 10-15 by 2025, further enhancing its operational capacity and growth potential.

Lazard's stock outlook is negatively impacted by the assumption that the M&A recovery may stall, leading to lower revenues and an increased compensation ratio by 2026 compared to initial estimates. The company's reliance on equity-driven asset management, particularly in an international context, faces headwinds from diminished investor sentiment in European and other international securities, which have exhibited consistent underperformance over the past decade. Furthermore, while broad exposure to global equities may present a potential future tailwind for asset managers, the current sentiment and structural challenges raise concerns about Lazard's near-term financial performance.