Houlihan Lokey Raised to Buy at Goldman on Restructuring Shift

Goldman upgrades Houlihan Lokey Inc. to buy from neutral as the firm is positioned to benefit from a shift toward more restructuring and financial-sponsor activity amid a slowing market for strategic M&A, especially outside of the U.S., analyst Richard Ramsden writes in a note.

• HLI may show more rev. stability than peers during a downturn, with restructuring contributing >30% of rev. vs avg. 20% for peers, and up to est. 55% in a downturn; sponsors represent >50% of deal activity vs 28% for peers
• In a separate note, Ramsden writes that 1Q is likely to be the first quarter to ...