Nomura Lowers Price Target On Greenhill & Co. Following 4Q EPS Report

In a report published Thursday, Nomura analyst Steven Chubak reiterated a Neutral rating on Greenhill & Co. GHL, but lowered the price target from $44.00 to $38.00. In the report, Nomura noted, “GHL reported 4Q EPS of $0.51, below our forecast of $0.69 and cons. of $0.62. GHL reported total revenues of $76.4mn, below our $95mn forecast (and $90mn consensus), a disappointing result. YoY decline is even more notable, with Advisory revenues down -2% YoY, vs. +20% growth at US Bulge Bracket peers (and mid-to-high teens growth for the broader industry per Dealogic). 2014 operating expenses declined -4% YoY (consistent with the % decline in revenues), reflecting continued comp discipline as well as favorable FX tailwinds. We cut our forecasts for 2015 and 2016 to $1.71 and $2.01, respectively, which compares to cons. of $2.03 and $2.27 (note: cons. has not yet been amended to reflect updated 4Q results, management guidance). We expect negative revisions to cons. given 4Q model flow-through impact and revenue forecasts, which appear too high for 1Q15 ($72mn) given the current backlog.” Greenhill & Co. closed on Wednesday at $38.23.