Houlihan Lokey: Initiate at Buy with $164 PO: Calm before the storm

Research evidence excerpt

Houlihan Lokey: Initiate at Buy with $164 PO: Calm before the storm

Accessible version

Houlihan Lokey

Initiate at Buy with $164 PO: Calm before

the storm

Initiating Coverage: BUY | PO: 164.00 USD | Price: 136.44 USD

Sponsor slump creating an attractive entry point 10 July 2026

We initiate coverage of Houlihan Lokey (HLI), a boutique investment bank primarily Equity

focused on advising clients on mid-cap (deal value <$1bn) transactions, with a Buy rating

and a $164 PO, implying 20% upside potential. While weak sponsor activity has weighed Gabriel Angelini Research Analyst

on sentiment YTD, we view HLI’s pullback as an attractive entry point to gain exposure BofAS

to what we consider the Goldman Sachs of middle-market M&A. We believe investors +1gabriel.angelini@bofa.com646 855 3081

are overlooking HLI's market-leading franchise and highly defensible earnings profile. Ebrahim H. Poonawala

HLI's restructuring business (~20% of revenue) provides EPS defensibility as higher-for- Research Analyst

BofAS

longer rates and AI-driven disruption create liability management opportunities. ebrahim.poonawala@bofa.com

Best positioned for a middle market recovery

We believe HLI is best positioned to benefit as macro overhangs ease. AI-related

Stock Datadisruption risks are becoming better understood, market performance is broadening

beyond mega-cap beneficiaries (Russell 2000 has outperformed S&P 500 YTD). At the Price 136.44 USD

same time, corporates and sponsors may look to lock in financing costs ahead of Price Objective 164.00 USD

potential rate volatility. Together, we expect these dynamics to support a healthier Date Established 10-Jul-2026

backdrop for middle-market transaction activity. Investment Opinion B-1-7

52-Week Range 131.31 USD -211.78 USD