A return to deal-making on Wall Street suggests there’s a buying opportunity in financial advisory firm Lazard , Morgan Stanley said. Analyst Ryan Kenny upgraded Lazard to overweight from equal weight and raised his price target, saying it’s poised to benefit from growing merger and acquisition activity. “Capital markets are starting to show signs of life, driving an improved outlook for M & A in 2024. Time to be nimble and get ahead of it,” Kenny wrote Wednesday. “We are upgrading our Midcap Advisors industry view to Attractive from In-Line and raising our price targets by a median of 25%.” LAZ 1D mountain Lazard shares 1-day Lazard shares are underperforming this year, down more than 1%. However, the analyst expects that should change as the asset management firm leaves behind fears of further bank failures and other macroeconomic shocks. The analyst’s $43 price target, raised from $36, is 31% above where shares closed Tuesday. The stock popped more than 4% during Wednesday trading. The analyst anticipates Lazard is the “least priced for a rebound” and is strategically positioned as markets begin to stabilize, particularly after the Federal Reserve pauses interest rate hikes. “LAZ is trading at only 7.7x 2024 PE, ~4 turns below its 2017-19 average next fiscal year PE multiple, one of the steepest discounts in our coverage,” Kenny wrote. “Assuming M & A as a % of Nominal GDP fully normalizes back to trend, LAZ is trading at an even steeper 6-turn discount to its 2017-19 average PE of 11.4x, in line with EVR (OW) but significantly more discounted than the rest of our coverage, which trades at only a 1-to 5-turn discount.” — CNBC’s Michael Bloom contributed to this report.
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