BMO Capital on Friday increased its price target for Moelis & Company (NYSE:MC) to $78.00 from $75.00, while retaining a Market Perform rating on the investment banking firm. The research note follows Moelis's reported fourth-quarter 2025 results and assesses both the drivers of the quarter's outperformance and how expense dynamics are likely to feed into forward projections.
Quarterly results and analyst reaction
Moelis reported fourth-quarter 2025 adjusted earnings per share of $1.13. That result exceeded BMO Capital's internal estimate of $1.09 and substantially topped consensus projections cited by BMO, which were reported at $0.84. In a separate mention of consensus forecasts, the company also exceeded a forecasted EPS of $0.83 as part of its reported releases.
Revenue for the quarter reached $488 million, surpassing an anticipated $437.9 million. BMO highlighted two primary contributors to the earnings beat: a 16-cent benefit from lower-than-expected compensation expenses and a 13-cent positive impact stemming from stronger revenue performance.
Expense trends and competitive context
BMO noted that Moelis's compensation ratio has returned to a more typical level and is now more in line with industry peers after a spike in 2023. That normalization was a key element in translating quarterly performance into better near-term profitability.
At the same time, BMO cautioned that growth in non-compensation expenses partially limited how much of the quarter's upside can be carried into forward estimates. The research firm characterized that non-comp expense trend as broadly consistent across the investment banking sector rather than unique to Moelis, suggesting a sector-level headwind for margin expansion.
Valuation and analyst target range
According to InvestingPro data cited in the research note, analyst price targets for Moelis span from $72 to $90. The stock is described as appearing undervalued against Fair Value estimates used by analysts. BMO's adjustment to $78 reflects the EPS beat and revenue strength coupled with the expense outlook described above.
Market reaction and outlook
Moelis's fourth-quarter performance and the subsequent note from BMO underscore the firm's capacity to deliver results above expectations in the recent quarter. Those results were followed by a positive investor response in after-hours trading, according to the reporting. Market participants and analysts will continue watching revenue trajectory, compensation ratios, and the path of non-compensation costs as they assess Moelis's earnings durability and valuation.