Lazard Is Buying the Market's Fallen Angels, From Cochlear to IDP Education
Lazard Asset Management has spent the past year buying former quality growth stocks after steep falls. It added Cochlear in April, has already sold Woolworths, and points to EBOS and Light & Wonder as examples of what it looks for.
13 Nov 2026 · 4 min read
In short
Lazard Asset Management said in October 2026 that over the past year it has bought several fallen angels: former quality growth stocks that once traded on very high multiples and then fell sharply, including Cochlear, Domino's Pizza, James Hardie, IDP Education and Reliance Worldwide.
Cochlear was the most recent addition, bought in April 2026 after a 45% fall in the last week of that month, while Woolworths, another fallen angel, has already been sold after its share price recovered.
Lazard also bought EBOS Group after it lost the Chemist Warehouse supply contract, citing 12.5 times forward earnings and an almost 5% fully franked yield, and described Light & Wonder as trading at around a 50% discount to Aristocrat.
A strategy built on falls
Lazard Asset Management has spent the past year buying stocks that the market once paid the most for. In an October 2026 article, the manager said it had bought “quite a few” fallen angels, businesses that “two, three or four years ago they all traded on very high multiples and were regarded as ‘quality growth’ stocks with big expectations and high prices.” What they have in common, according to Lazard, is that “many fell very significantly in price.”
The most recent of them is Cochlear. Lazard said it added the hearing implant maker in April, “after the 45 per cent decline in the last week of April.” The other fallen angels it named are Domino's Pizza, James Hardie, IDP Education and Reliance Worldwide. Together they span fast food, building products, international education and plumbing, sectors with little in common beyond a large fall from a high valuation.
Lazard describes the approach as a matter of price rather than sector. “We are guided by the comparison between the price of a stock and our assessed fair value, so we often buy stocks and sectors that have been de-rated,” the manager said.
We are guided by the comparison between the price of a stock and our assessed fair value, so we often buy stocks and sectors that have been de-rated.
— Lazard Asset Management, Article, October 2026
Some of the bets are already paying
Lazard's October commentary suggests the earliest purchases have started to work. The manager listed Reliance Worldwide and Domino's Pizza among the strong contributors to its fund over the past year, alongside Woodside, AMP, Rio Tinto and Viva Energy.
Woolworths shows how the strategy ends as well as how it starts. Lazard counted the supermarket group among its fallen angels, and then sold it once the price moved. “We have already sold Woolworths after the share price recovery,” the manager said. The exit fits the framework Lazard set out: when the gap between the share price and its assessed fair value closes, the reason to own the stock goes with it.
That leaves the newer additions, Cochlear, James Hardie and IDP Education, as the part of the group still waiting for a recovery. Lazard did not give individual price targets or timeframes for these holdings in its commentary.
EBOS: a contract loss and a low multiple
Asked to name a stock in the fund that most people have not heard of, Lazard pointed to EBOS Group, the wholesale pharmaceutical distributor. Lazard said it “bought wholesale pharmaceutical distribution company EBOS after the loss of the Chemist Warehouse wholesale supply contract.”
The manager's case rests on valuation and cash flow. EBOS “trades at only 12.5 times forward earnings-per-share, near the lowest point of its 12-year trading history,” according to Lazard, and pays an almost 5% fully franked dividend based on what the manager calls its conservative expectations. Lazard also expects spending to fall: “With its major distribution centre renewal program completed, capex is declining and that frees up cash for the future.”
Looking further out, Lazard said EBOS “has a strong market position in a sector supported by demographics and exposure to higher-value medicines including GLP-1s.”
EBOS has a strong market position in a sector supported by demographics and exposure to higher-value medicines including GLP-1s.
— Lazard Asset Management, Article, October 2026
Light & Wonder and the Aristocrat gap
When asked which stock in its fund the market prices least generously, Lazard named Light & Wonder, which it described as “the world's second-largest supplier of electronic gaming machines behind Aristocrat Leisure.” Lazard noted that the company was in trouble not long ago, but that “since 2020 the company has executed an impressive turnaround under new leadership.”
The manager's argument is a comparison. Light & Wonder's businesses include traditional casino games, SciPlay for mobile phones and iGaming, which Lazard described as “the new growth engine in the US.” Despite what Lazard sees as growth prospects similar to Aristocrat's, it said Light & Wonder “trades at a significant valuation discount of around 50 per cent, largely reflecting its more leveraged balance sheet.”
Lazard is less worried about that debt than the market appears to be. It said it is “less concerned about the gearing, currently around three times net debt to EBITDA, given the strong cash generation of the gaming business and its focus on reducing leverage.”
What Lazard is watching
Lazard's fallen angels strategy now has three stages visible in one portfolio: Woolworths, bought and already sold on its recovery; Domino's Pizza and Reliance Worldwide, which have contributed to returns; and Cochlear, James Hardie and IDP Education, where the recovery Lazard is positioned for has yet to show in its commentary. EBOS and Light & Wonder sit alongside them as cases where Lazard sees a low price against cash generation. The test for each, on Lazard's own framework, is whether the gap between the share price and its assessed fair value closes.
Questions
What are fallen angels in Lazard Asset Management's strategy?
Lazard Asset Management uses fallen angels to describe stocks that two to four years ago traded on very high multiples and were regarded as quality growth stocks, and whose share prices have since fallen significantly. In October 2026 it said it had bought several, including Cochlear, Domino's Pizza, James Hardie, IDP Education and Reliance Worldwide.
When did Lazard buy Cochlear?
Lazard Asset Management said it bought Cochlear in April 2026, after the share price fell 45% in the last week of April, making it the most recent addition to its group of fallen angels.
Why did Lazard buy EBOS Group?
Lazard Asset Management bought EBOS Group after it lost the Chemist Warehouse wholesale supply contract, citing a valuation of 12.5 times forward earnings near the low of its 12-year history, an almost 5% fully franked dividend, falling capital expenditure and exposure to higher-value medicines including GLP-1s.
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