Lazard (LAZ) shares are up slightly today, drawing attention from investors curious about the recent movement. With its year-to-date return just under flat and modest gains over the past month, the longer-term trajectory of Lazard is coming into focus.

Momentum in Lazard’s shares has perked up recently, with a 3.52% 7-day return capping a stretch of modest gains and suggesting renewed investor interest. While the 1-year total shareholder return is still in the red, the longer-term perspective paints a stronger picture with a 74% total shareholder return over five years.

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But with Lazard trading at a noticeable discount to analyst price targets and showing strong long-term returns, is this an undervalued opportunity, or has the market already accounted for the company’s future growth prospects?

Most Popular Narrative: 13.1% Undervalued

With Lazard’s fair value estimate set at $58.17, the current share price of $50.52 signals that the market may be underpricing future growth. However, this narrative’s assumptions set a high bar for what needs to happen next.

Lazard's diversification in M&A, non-M&A, and global operations allows the firm to adapt to changing market conditions and capture opportunities across different regions. This could potentially stabilize revenues amidst economic uncertainties. Growth in Lazard's financial advisory backlog, particularly in Europe, combined with a diversified business model across geographic and product lines, could buoy revenues even if specific markets face challenges.

What drives this calculation? The answer lies in the bold expectations for revenue acceleration and expanding profit margins, paired with a future multiple that is far below sector heavyweights. Curious what specific forecasts support such a valuation jump? The real story is in the numbers.

Result: Fair Value of $58.17 (UNDERVALUED)

However, global expansion could strain resources, and rising costs from advisory initiatives may compress margins. This could potentially challenge Lazard’s optimistic growth outlook.

Build Your Own Lazard Narrative

If you see things differently or would rather dive into the details on your own terms, you can put together your own view in just a few minutes, so Do it your way.

A great starting point for your Lazard research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

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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.