Evercore’s Multi-Billion Dollar Advice Puts it On Par With Investment Banking Giants Like Goldman and JPMorgan – The Average Joe
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    Evercore’s Multi-Billion Dollar Advice Puts it On Par With Investment Banking Giants Like Goldman and JPMorgan

    Noah Weidner

    March 28, 2024

    You’ve probably never heard of Evercore ($EVR), but chances are you’ve seen their work. Over the past few years, this investment banking firm has climbed the ranks on Wall Street — advising on more than $5T worth of mergers, acquisitions, and restructuring deals. It’s now become America’s largest independent financial adviser, giving bulge-bracket investment banks a run for their money.

    A big deal: Evercore had a stellar 2023, raking in over $2B in advisory fees alone. That puts them fourth behind heavyweights like Morgan Stanley ($2.2B), JPMorgan ($2.8B), and Goldman Sachs ($3.3B) — placing Evercore in the upper echelon of the advisory business. According to the Financial Times, they’ve been involved in “nearly every mega-deal in the US” recently, including significant deals like Nippon Steel’s $14.9B buyout of US Steel and Chevron’s $60B acquisition of HESS.

    • Experts compare Evercore to what “Goldman was 20 years ago” — with a significant portion of its staff alums from the world’s largest investment bank (FT).
    • And being compared to Goldman isn’t such a bad thing, considering $GS’ market cap is nearly 17x higher and has outperformed the S&P 500 in the past five years.

    What’s good advice worth?

    Unlike big banks, Evercore doesn’t accept deposits or manage extensive portfolios like a trading firm. Instead, it focuses on independent financial advising, which brings in almost all of its revenue. Yet, despite this narrow focus, $EVR is still valued at over $7.4B.

    • Their stock has risen by more than 70% in the past year (and that’s not counting its generous 1.6% dividend yield), outpacing other independent advisers like Lazard ($LAZ), PJT Partners ($PJT), and Moelis ($MC).
    • However, UBS research analyst Brennan Hawken believes that Evercore’s valuation “is getting less respect” because its next leg of growth will be “more challenging.”

    Forward-looking: Evercore sees potential in expanding its wealth management and equity research business, especially overseas in Europe and Asia, where competitors like Moelis have been unlocking previously untapped markets. If Evercore can keep up its streak of increasing dividends like in the past 13 years, it could mean big returns for investors.

    Read: Why dividends will be increasingly important for investors in the coming years

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