Lazard: New CEO Has Ambitions of High Revenue Growth Amid Operating Margin Uncertainty, Tax Changes

New Lazard CEO Peter Orszag aims to double revenue by 2030 and deliver average total shareholder returns of 10%-15% per year through 2030. Disclosed plans include hiring more managing directors, increasing employee productivity, improving asset-management distribution, acquiring emerging asset managers, and maintaining its historical operating margin. Advisory firms that hired aggressively in the past decade generally did well. However, the past decade benefited from low interest rates, while the next decade will likely have relatively higher interest rates and increased geopolitical uncertainty. For the moment, we're rather skeptical of revenue doubling. That said, our fair value estimate for the company is still $37.50, and we assess shares of narrow-moat Lazard as undervalued.