Last Update 02 Nov 25
Fair value Increased 2.60%Analysts have raised their price target for Raymond James Financial from $179.75 to $184.42, citing improved revenue growth and profit margin expectations following recent quarterly performance and positive business momentum.
Analyst Commentary
Recent street research on Raymond James Financial reflects a mix of optimism and caution among analysts, with several price target adjustments following the latest quarterly results. The collective commentary provides insights into the company’s execution, valuation, and future growth prospects.
Bullish Takeaways- Bullish analysts point to strong momentum across Raymond James’ business segments, especially within the Private Client Group and capital markets. These areas have benefited from increased activity and robust capital raising.
- Share repurchase efforts continue to support stable capital ratios, contributing positively to shareholder value and indicating disciplined capital management.
- Improved organic growth and a strong recruiting pipeline are cited as positives for future expansion, positioning the company well going into fiscal 2026.
- Recent results have consistently met or exceeded consensus expectations, bolstered by better-than-expected transactional revenue and investment banking performance.
- Bearish analysts caution that elevated valuations and a lack of clear near-term catalysts may limit upside potential, especially as growth trails certain competitors.
- The current momentum in capital markets is viewed as unsustainable, with concerns regarding the durability of high levels of capital raising and M&A activity.
- There is some wariness about a "more expensive entry point" into shares coupled with the prospect of lower interest rates ahead. This could pressure future profitability.
- Slow earnings growth, attributed to a disciplined but measured approach to advisor recruitment, could challenge Raymond James’ ability to accelerate expansion relative to peers.
What's in the News
- Raymond James Financial completed the repurchase of 2,107,000 shares between July 1, 2025 and September 30, 2025, bringing total buybacks under the December 2024 program to 7,418,996 shares for $1,101.6 million (Key Developments).
- The company is actively seeking acquisition opportunities that fit its established criteria for strategic and cultural alignment. The focus remains on generating shareholder returns (Key Developments).
- Raymond James' Financial Institutions Division was chosen by First National Bank of Sparta to support its investment program. This enables Patton Wealth Management to provide Raymond James Financial Services to clients in Illinois, with Brian Patton managing around $261 million in assets (Key Developments).
Valuation Changes
- Consensus Analyst Price Target has risen slightly, moving from $179.75 to $184.42 per share.
- Discount Rate has fallen marginally, decreasing from 8.39 percent to 8.38 percent.
- Revenue Growth assumptions have increased meaningfully, from 8.03 percent to 9.24 percent.
- Net Profit Margin is now estimated at 15.73 percent, up from 15.66 percent.
- Future P/E ratio expectation has declined and is now at 14.78x compared to the previous 15.66x.
Key Takeaways
- Successful recruitment and strategic focus on high-net-worth clients are expected to drive future revenue growth and strengthen long-term revenue streams.
- Investment in AI capabilities and strong loan growth may enhance operational efficiencies, improve net margins, and positively impact future earnings.
- Heightened market and interest rate uncertainties, competitive M&A landscapes, and tech investment risks could negatively affect revenue growth, profitability, and net margins.
Catalysts
About Raymond James Financial- A diversified financial services company, provides private client group, capital markets, asset management, banking, and other services to individuals, corporations, and municipalities in the United States, Canada, and Europe.
- Raymond James' successful recruiting of financial advisors with high trailing production and assets from other firms has bolstered client assets under administration, which is expected to drive future revenue growth through increased client assets and new business inflows.
- The establishment of a Chief AI Officer role highlights Raymond James' investment in artificial intelligence to enhance financial professional capabilities and client service, potentially improving net margins through increased operational efficiencies.
- The bank segment's strong loan growth, particularly in securities-based lending, coupled with high credit quality, suggests potential increases in net interest income and margins, contributing positively to future earnings.
- Consistent share repurchases, underpinned by strong capital and liquidity positions, indicate a commitment to enhancing shareholder value through EPS growth, alongside maintaining capacity for strategic acquisitions that align with cultural and financial goals.
- The strategic focus on providing comprehensive private investment alternatives to high-net-worth clients through a robust platform is poised to attract more high-value clients, potentially increasing fee-based revenues and strengthening long-term revenue streams.
Raymond James Financial Future Earnings and Revenue Growth
Assumptions
How have these above catalysts been quantified?- Analysts are assuming Raymond James Financial's revenue will grow by 8.0% annually over the next 3 years.
- Analysts assume that profit margins will increase from 15.4% today to 15.7% in 3 years time.
- Analysts expect earnings to reach $2.7 billion (and earnings per share of $14.29) by about September 2028, up from $2.1 billion today.
- In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 15.1x on those 2028 earnings, down from 15.5x today. This future PE is lower than the current PE for the US Capital Markets industry at 26.7x.
- Analysts expect the number of shares outstanding to decline by 2.28% per year for the next 3 years.
- To value all of this in today's terms, we will use a discount rate of 8.39%, as per the Simply Wall St company report.
Raymond James Financial Future Earnings Per Share Growth
Risks
What could happen that would invalidate this narrative?- Heightened market uncertainty and volatility associated with tariff negotiations could negatively impact investment banking closings, leading to reduced revenue from this segment.
- Market and interest rate uncertainty pose challenges to the fixed income market, which could unfavorably impact brokerage revenues and related earnings.
- Increased client caution due to macroeconomic uncertainty may impact net new asset growth and thus lower overall revenue growth.
- Competitive M&A landscapes may pressure Raymond James to stretch on valuations, affecting profitability and capital allocation efficiency.
- The firm's commitment to significant investment in technology, such as AI, though potentially beneficial, presents risks around overspending without clear short-term financial returns, impacting net margins.
Valuation
How have all the factors above been brought together to estimate a fair value?- The analysts have a consensus price target of $173.273 for Raymond James Financial based on their expectations of its future earnings growth, profit margins and other risk factors.
- In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $17.3 billion, earnings will come to $2.7 billion, and it would be trading on a PE ratio of 15.1x, assuming you use a discount rate of 8.4%.
- Given the current share price of $165.59, the analyst price target of $173.27 is 4.4% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
- We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.
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Disclaimer
AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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