On Thursday, JPMorgan (NYSE:JPM) made an adjustment to its price target on financial services firm Raymond James, listed on the New York Stock Exchange under the ticker NYSE:RJF. The new shares is set at $135.00, a slight decrease from the previous $137.00, while the firm maintained an Overweight rating on the stock.
Raymond James reported adjusted earnings per share (EPS) of $2.39 for the third fiscal quarter of 2024, surpassing the Bloomberg consensus expectations slightly. The company's Private Client Group (PCG) experienced an uptick in domestic net new asset growth, which annualized to +5.2% in the second fiscal quarter of 2024, translating to an addition of $16.5 billion.
The company also highlighted its strong recruiting pipeline, which is expected to support organic revenue growth moving forward. The adjusted pre-tax margins for Raymond James remained relatively stable quarter-over-quarter at 20.7% in the third fiscal quarter. However, the report noted that the Capital Markets segment is still operating at a pre-tax loss, reflecting the gradual recovery of the capital markets and M&A activities.
Raymond James saw a marginal month-over-month increase in domestic cash sweep and enhanced savings program (ESP) balances, reaching $56.4 billion in June compared to $56.2 billion in May.
In the broader context of the industry, Raymond James has recognized the current focus on cash sweep deposit rates. Despite this, the company has indicated that it does not intend to alter its rates at this point, nor does it see a necessity to do so. JPMorgan's commentary underscored Raymond James' well-positioned offerings and conservative approach to operations across its business lines amid a dynamic financial landscape.
In other recent news, Raymond James Financial (NYSE:RJF), Inc. reported significant growth in its fiscal Q3 2024 results. The firm recorded an 11% year-over-year increase in net revenues, reaching a record $3.23 billion, with net income available to common shareholders standing at $491 million, or $2.31 per diluted share. These results were buoyed by a record number of financial advisors and client assets under administration, reaching a new high of $1.48 trillion.
The firm has also been active in share repurchases, buying back 2 million shares of common stock for $243 million. Despite a pre-tax loss in the capital markets segment, the asset management and bank segments reported strong pre-tax income. The company has expressed plans to continue share repurchases, focus on corporate development, and explore potential merger and acquisition opportunities.
However, the firm's total assets saw a 1% sequential decrease to $80.6 billion, and non-compensation expenses increased to support business growth. The capital market segment reported a pre-tax loss of $14 million. Despite these challenges, Raymond James remains optimistic about its position for growth across all business segments.
InvestingPro Insights
Following JPMorgan's recent price target update for Raymond James (NYSE:RJF), a glance at the company through the lens of InvestingPro offers additional insights. With a market capitalization of $24.14 billion, Raymond James trades at a P/E ratio of 13.73, reflecting investor sentiment on its earnings capacity. Analysts have shown confidence in the company, with 5 analysts revising their earnings upwards for the upcoming period, which could signal a positive outlook for future profitability.
Raymond James' reputation for consistent dividends is highlighted by its track record of maintaining dividend payments for 40 consecutive years, a testament to its financial stability and commitment to shareholders. Moreover, the company's solid gross profit margin of 93.43% over the last twelve months as of Q2 2024, coupled with an operating income margin of 19.91%, underscores its operational efficiency.
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