Houlihan Lokey Well Positioned for Middle-Market Recovery, BofA Says

MT Newswires Live07-10 22:33

Houlihan Lokey (HLI) is well positioned to benefit from a recovery in middle-market mergers and acquisitions activity, while its restructuring business provides earnings resilience, BofA Securities said in a Friday note.

The firm said easing macroeconomic headwinds, improving visibility into AI-related disruption risks and broader market participation beyond large-cap stocks should support a recovery in middle-market transactions.

BofA also said companies and private equity sponsors may seek to lock in financing costs ahead of potential interest rate volatility.

The investment firm said Q1 results are likely to remain under pressure from the Iran conflict and concerns about AI-related disruption, but those risks appear largely reflected in the stock.

BofA initiated coverage of the stock with a buy rating and a $164 price target, saying the recent pullback presents an attractive entry point as investors are overlooking the company's market-leading franchise and defensible earnings profile.

Price: 133.59, Change: -2.85, Percent Change: -2.09

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