Stock Analysis & Valuation PJT Partners Inc. (PJT)

• Previous Close: $173.03
• Sector Valuation Confidence Level: High

Valuation method	Value, $	Upside, %
Artificial intelligence (AI)	117.19	-32
Intrinsic value (DCF)	683.45	295
Graham-Dodd Method	12.00	-93
Graham Formula	191.40	11

Strategic Investment Analysis

Company Overview

PJT Partners Inc. (NYSE: PJT) is a leading global investment bank specializing in strategic advisory, restructuring, and capital markets solutions. Headquartered in New York, PJT serves corporations, financial sponsors, institutional investors, and governments with expertise in mergers & acquisitions (M&A), shareholder advisory, and private fund advisory. The firm operates in three core segments: Strategic Advisory, Restructuring & Special Situations, and Private Fund Advisory. PJT differentiates itself through deep industry relationships, a conflict-free advisory model, and a focus on complex, high-stakes transactions. With a market cap of ~$3.6B, PJT competes in the capital markets sector against bulge-bracket banks and elite boutiques. The firm’s restructuring practice is particularly notable, advising on high-profile distressed situations. PJT’s lean structure and high-touch service model allow for strong client alignment, making it a preferred advisor for board-level strategic decisions. The company spun out from Blackstone in 2015 and maintains a reputation for independence and senior-level attention.

Investment Summary

PJT Partners presents a compelling niche investment in the advisory banking space, trading at a discount to pure-play peers like Evercore (EVR) despite comparable margins. The firm’s restructuring segment provides counter-cyclical revenue stability, while its private fund advisory business benefits from the growth of private markets. However, reliance on transaction volumes makes earnings volatile—FY2023 saw a 17% revenue decline amid slower M&A activity. The balance sheet is conservative (net cash position), and the 2.2% dividend yield offers downside protection. Key risks include client concentration (top 10 clients generated 38% of 2022 revenue) and inability to scale like bulge-bracket competitors. At 12x forward P/E, PJT could appeal to investors seeking exposure to a high-quality boutique with restructuring upside in potential economic downturns.

Competitive Analysis

PJT occupies a unique position between elite boutiques (e.g., Centerview) and restructuring specialists (e.g., Houlihan Lokey). Unlike bulge-bracket banks, PJT avoids capital markets conflicts, allowing unfiltered advice—a key selling point for activism defense and contested M&A. The restructuring practice (40% of revenue) is a differentiator, with PJT advising on 9 of the 15 largest U.S. bankruptcies since 2018. This provides revenue diversification when M&A slows. However, PJT lacks the balance sheet to underwrite deals like Goldman Sachs (GS), limiting capital markets upside. The private fund advisory business competes with Evercore’s (EVR) fund placement group but lacks the scale of Lazard’s (LAZ) alternatives platform. Talent retention is critical—PJT’s partnership model helps, but senior banker departures could disrupt client relationships. Geographically, PJT is underpenetrated in Asia versus Moelis (MC). The firm’s ~25% operating margin trails pure-play boutiques (EVR: 30%) due to higher restructuring-related costs.

Major Competitors

• Evercore Inc. (EVR): Evercore is PJT’s closest pure-play comp, with stronger M&A advisory (ranked #3 in global M&A) but weaker restructuring capabilities. EVR’s larger scale drives better margins (30% vs PJT’s 25%), but lacks PJT’s counter-cyclical restructuring buffer. EVR is more exposed to cyclical equity underwriting.
• Houlihan Lokey Inc. (HLI): Houlihan dominates restructuring (60% market share vs PJT’s 20%) with a broader middle-market focus. HLI’s valuation is richer (20x P/E vs PJT’s 12x) due to steadier earnings. However, PJT advises on larger, more complex cases and has superior private fund advisory capabilities.
• Lazard Ltd (LAZ): Lazard competes in restructuring and M&A but with greater international exposure. LAZ’s asset management division provides stable fees, reducing volatility. PJT is more specialized in financial sponsor coverage and has higher growth in private capital advisory.
• Moelis & Company (MC): Moelis is similarly sized but more concentrated in M&A (80% revenue vs PJT’s 50%). MC has stronger Asia-Pacific presence but no meaningful restructuring practice. PJT’s diversified revenue streams make it less vulnerable to M&A downturns.
• Goldman Sachs Group (GS): Goldman’s full-service model competes for mega-deals where PJT can’t provide financing. However, PJT wins conflicts-sensitive assignments Goldman can’t take. GS’s balance sheet is a structural advantage, but PJT’s senior banker attention appeals to select clients.