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William Blair & Co. Reiterates Outperform Rating on Greenhill & Co. (GHL)


William Blair & Co. is out with a research report this morning, where it reiterates its Outperform rating on shares of Greenhill & Co. Inc. (NYSE: GHL); it did not provide a price target.

The WB analysts said, “Second-quarter EPS of $0.57 were in line with our estimate, but below the consensus estimate of $0.61. While advisory revenue was below our estimate and the compensation ratio above our estimate, the net contribution from merchant banking was above our estimate. Advisory revenue increased 36% year-over-year and 69% sequentially to $61.9 million, moderately below our $67.0 million estimate, although the pipeline strengthened during the quarter.”

They added, “Merchant banking added $21.5 million of revenue, compared with our $20.0 million estimate and $12.2 million last quarter given the significant appreciation in Iridium during the quarter. A pretax operating margin of 36.2%, compared with 6.5% last quarter, 38.1% for all of 2009, and our 37.5% estimate. Thecompensation ratio was 45.9%, compared with our 45.0% estimate although more in line with historical levels.”

The WB analysts further said, “We are maintaining our 2010 EPS estimate of $1.91 and our 2011 EPS estimate of $3.40, but believe that the consensus estimate for
2010 needs to come down from current levels. While expectations have been tempered over the past several weeks, near-term visibility is still lacking, and we believe expectations for late 2010 and 2011 need to be reset a bit further before the stock is set for outperformance.”

Posted-In: William Blair & Company.Analyst Color Analyst Ratings


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