Skip to main content

Market Overview

KBW's 4 Takeaways From Meeting With Houlihan Lokey Management

Share:
KBW's 4 Takeaways From Meeting With Houlihan Lokey Management

Keefe, Bruyette & Woods believes Houlihan Lokey Inc (NYSE: HLI) stands to gain from M&A volume recovery, stable financial advisory services and strong restructuring franchise. The comments come after a meeting with CEO Scott Beiser and Chief Financial Officer Lindsey Alley last week.

Analyst Ann Dai reiterated its Outperform rating with a target price of $28 on the company's shares. The brokerage also listed four key takeaways from the meeting.

Key Points

1. Middle-market M&A level activity: The brokerage believes Houlihan Lokey has enough liquidity to fund this segment, although some business development companies are struggling to raise fresh equity capital.

2. The company would not be impacted by the proposed regulations in respect of mega deals from the middle-market. KBW thinks the fresh regulation could play a spoil sport only in the case of complex deals though deal volume could take a hit during a period of crisis.

Related Link: Reminder: Houlihan Lokey Goes Ex-Dividend Soon

3. Restructuring: It contributes about 30 percent of revenues. Dai thinks the stock is more defensive, citing the strong restructuring franchise apart from stable revenues from its financial advisory services.

4. Business model ensures flexible cash deployment. "In addition to paying the dividend and partially funding acquisitions with cash, we believe that management is open to issuing special dividends if they believe excess cash levels have built up beyond what they need to run the business and they see limited opportunities to put the money to work accretively," the brokerage viewed in a research note.

At time of writing, the stock traded at $24.29, shedding $0.09, or 0.37 percent.

Full ratings data available on Benzinga Pro.

Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!

Latest Ratings for HLI

DateFirmActionFromTo
Mar 2021Goldman SachsDowngradesBuyNeutral
Jan 2021Morgan StanleyMaintainsUnderweight
Dec 2020Seaport GlobalInitiates Coverage OnNeutral

View More Analyst Ratings for HLI
View the Latest Analyst Ratings

 

Related Articles (HLI)

View Comments and Join the Discussion!

Posted-In: Analyst Color Long Ideas News Price Target Reiteration Management Events Analyst Ratings

Latest Ratings

StockFirmActionPT
RIDERF LaffertyDowngrades
RAPTCantor FitzgeraldMaintains71.0
UALCitigroupMaintains67.0
GDOTCitigroupMaintains50.0
VRTXPiper SandlerMaintains261.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com