Outsized Selloff In Evercore 'Seems Overdone': BRG Says Buy, It's No 'Falling Knife'

In a report issued Monday, Buckingham Research Group analyst James Mitchell reiterated a Buy rating and $66 price target on shares of Evercore Partners Inc. EVR, arguing that the issue recently witnessed an “outsized” selloff, which “seems overdone.”

Well-Positioned Stock Post-Brexit

As per the research firm, the selloff in Evercore’s stock following the Brexit has opened an attractive entry point for long-term investors who could perceive an upside of roughly 60 percent. While the experts understand the tumble in financial stocks, considering the uncertainty around the impact of a Brexit, they are not convinced Evercore is one of the worst performers, having lost more than 23 percent between Friday and Monday trading — versus its peers’ average of 16 percent.

Related Link: Citi Research Sees Safety In Small Caps

In fact, BRG analysts think that Evercore is very well positioned to increase its market share “through a pull back in M&A activity” due to:

1. Its robust long-term growth track record
2. The continuation of said trend of strong market momentum in the second quarter of 2016
3. The 200 percent year-over-year surge in its fee pipeline, which provides a substantial “cushion for EPS to weather a temporary disruption in deal flow, with sizable upside potential in 2Q16”
4. Limited exposure to overseas markets – or about 80 percent of revenue derived from North America, and larger business line diversification
5. The fact that the stock is trading at a three-year low.

In conclusion, while BRG assures it is “not trying to encourage investors to catch a ‘falling knife’ in an uncertain market outlook,” the analysts do believe that Evercore’s underperformance has been overdone and, has thus opened an attractive entry point for long-term fundamental investors.

Disclosure: Javier Hasse holds no interest in any of the securities or entities mentioned above.