Is It Too Late To Consider Evercore (EVR) After Its Strong Multi Year Run?
- Investors may be wondering whether Evercore, at around US$331 per share, still offers value or whether most of the easy gains are already behind it.
- The stock has delivered a 3.1% move over the last week and 7.9% over the past month, while year to date it is at a 5.7% decline against a 54.6% return over the last year, a 225.1% return over three years, and 154.1% over five years.
- Recent coverage has focused on Evercore's role in major advisory mandates and its position within capital markets activity. This helps explain why the stock has been in focus for investors and provides context when considering how much of that story might already be reflected in the current share price.
- Evercore currently holds a valuation score of 3 out of 6. The rest of this article will walk through what different valuation approaches indicate about the stock and conclude with a framework that many investors find useful for judging value over time.
Approach 1: Evercore Excess Returns Analysis
The Excess Returns model looks at how much profit a company is expected to earn above the return that equity investors require, then capitalizes those surplus profits into an intrinsic value per share.
For Evercore, the model starts with a Book Value of $52.74 per share and a Stable Book Value estimate of $70.64 per share, based on weighted future book value estimates from 2 analysts. On this equity base, the stock is linked to a Stable EPS estimate of $25.18 per share, sourced from weighted future return on equity estimates from 4 analysts, implying an Average Return on Equity of 35.64%.
The required Cost of Equity is $5.62 per share, so the Excess Return is $19.55 per share. In other words, the model assumes Evercore could earn profits meaningfully above what equity holders are assumed to require, and then uses those excess amounts to estimate intrinsic value.
This Excess Returns valuation arrives at a fair value of about $512.79 per share. Relative to the current price around $331, this implies the stock is 35.4% undervalued on this approach.
Result: UNDERVALUED
Our Excess Returns analysis suggests Evercore is undervalued by 35.4%. Track this in your watchlist or portfolio, or discover 51 more high quality undervalued stocks.
Approach 2: Evercore Price vs Earnings
For a profitable company like Evercore, the P/E ratio is a useful shorthand for how much investors are paying for each dollar of earnings. It helps you see, at a glance, how the market is weighing the company’s earnings power against other opportunities.
In general, higher growth expectations and lower perceived risk tend to support a higher P/E, while slower growth or higher risk usually point to a lower, more conservative P/E. So context really matters when judging what looks "normal" for any stock.
Evercore currently trades on a P/E of 17.56x. That is below the Capital Markets industry average of about 41.88x, and slightly above the peer group average of 15.99x. Simply Wall St’s Fair Ratio for Evercore is 14.08x. This is its estimate of a suitable P/E once factors such as earnings growth characteristics, industry, profit margins, market cap and company specific risks are taken into account.
The Fair Ratio can be more informative than a simple comparison with peers or the wider industry because it adjusts for those company specific features rather than assuming all firms deserve the same multiple. Set against this Fair Ratio, Evercore’s 17.56x P/E suggests the stock is trading at a richer level than the model would imply.
Result: OVERVALUED
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Upgrade Your Decision Making: Choose your Evercore Narrative
Earlier it was mentioned that there is an even better way to understand valuation. Narratives on Simply Wall St give you a simple story behind the numbers by linking your view of Evercore’s business to a forecast for revenue, earnings and margins, then turning that into a Fair Value you can compare with the current price, all within the Community page used by millions of investors.
Instead of treating Evercore as just a P/E or target price, you choose or build the Narrative that fits your view. For example, you might consider a more optimistic scenario that lines up with a Fair Value around US$435, or a cautious scenario closer to US$310, then see in one place whether your Fair Value is above or below today’s share price and what assumptions are driving that gap.
Because these Narratives update automatically when new data comes in, such as earnings, news or refreshed analyst estimates, you are not locked into a one off model. You can keep tracking whether the story you believe in for Evercore still matches the numbers on the screen.
For Evercore however, we will make it really easy for you with previews of two leading Evercore Narratives.
Start by asking which story feels closer to how you see the business, then compare those assumptions with your own expectations for deals, margins, and valuation over time.
Fair value in this bullish Narrative: US$435.00 per share
Implied discount to that fair value at the last close of US$331.28: about 24% undervalued
Revenue growth assumption: 12.98% a year
- Analysts in this camp expect M&A activity, private capital, and wealth transfer trends to support higher advisory revenues and market share for Evercore over time.
- They build in revenue growth of around 13% per year and assume slightly lower profit margins by 2029, with earnings of about US$1.0b and earnings per share of US$24.17.
- To reach the US$435 price target by 2029, this view relies on the stock trading on a P/E of 21.7x, with risks around technology disruption, regulation, competition, and talent retention clearly flagged.
Fair value in this bearish Narrative: US$310.00 per share
Implied premium to that fair value at the last close of US$331.28: about 6.4% overvalued
Revenue growth assumption: 1.49% a year
- The bearish view expects only low single digit revenue growth as technology, client in sourcing, and tighter regulation weigh on traditional advisory fee pools.
- This Narrative assumes earnings of about US$648.5m and earnings per share of US$17.00 by 2029, with margins edging up but share count also rising by 2.45% a year.
- To support a US$310 price target, this camp uses a P/E of 25.6x on 2029 earnings and highlights risks around slower deal flow, fee compression, and higher operating costs as key constraints.
If you want to see how your own view compares with these bullish and bearish setups, and test different assumptions around earnings, margins, and valuation, it is worth looking at the full Narrative range for Evercore and building a version that fits your expectations.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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