HLI - Houlihan Lokey upped at Morgan Stanley while Lazard Moelis get cut

Morgan Stanley analyst Manan Gosalia on Monday has upgraded Houlihan Lokey ( NYSE: HLI ) to Equal-Weight from Underweight on the basis of a more defensive play than its peers amid mounting recession fears.

Specifically, Gosalia pointed out Houlihan's ( HLI ) "skew to the counter-cyclical restructuring business (typically 30% of revenues) and less volatile Financial & Valuation Advisory business (15% of revenues)" as contributors to its defensive characteristics, according to a note written to clients Monday.

On the flip side, the analyst downgraded Lazard ( NYSE: LAZ ) to Underweight from Equal-Weight amid widespread market depreciation and elevated geopolitical risks in Europe.

Keep in mind that 35% to 40% of Lazard's ( LAZ ) mergers and acquisitions revenues come from Europe, which is expected to see a technical recession starting in Q4, the note said.

As for Moelis & Company ( NYSE: MC ), Gosalia is cutting the stock to Underweight from Equal-Weight due to weaker near-term deal activity, suggesting an overall slowdown in revenues.

"Given that the time taken to close deals has been extending and deal announcements are declining across the industry, we expect the weaker pipeline could weigh on the stock," Gosalia warned.

SA's Quant Rating , meanwhile, screens Cowen ( COWN ) as the best-rated investment bank among its peers, followed by Morgan Stanley ( MS ) and LPL Financial ( LPLA ).

Previously, (July 13) Lazard AUM fell around 8.2% in June .

For further details see: