Morgan Stanley analyst Ryan Kenny double upgraded Houlihan Lokey (HLI) to Overweight from Underweight with a price target of $190, down from $201. The firm views Houlihan as a “more defensive play.” The company has less earnings volatility in a bear case scenario given its “strong” adjusted compensation ratio management, which has held flat at 61.5% every quarter for the last three years, and its “more resilient” revenue mix, the analyst tells investors in a research note. Morgan Stanley adds that Houlihan Lokey has also demonstrated strong non-comp efficiencies through initiatives like Project Solo.
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