RJF: Share Repurchases Will Support Earnings Power Into 2026

Analysts modestly raised their blended price target on Raymond James Financial to approximately $183.27 from about $183.80, as they factor in slightly lower revenue growth assumptions but better than previously expected profitability, driven by resilient transactional activity, improved organic growth in the Private Client Group, and continued capital returns.

Analyst Commentary

Recent Street research reflects a generally constructive stance on Raymond James Financial, with most firms nudging price targets higher while keeping ratings clustered around Neutral and Market Perform. The revisions largely acknowledge better execution across key business lines and a healthier macro backdrop, but also highlight valuation and sustainability concerns that temper enthusiasm.

Bullish Takeaways

• Bullish analysts point to improving organic growth in the Private Client Group and a disciplined advisor recruiting strategy that is supporting more stable, higher quality earnings.
• Stronger than expected transactional revenue and investment banking activity, alongside momentum across multiple business segments, are seen as reinforcing near term earnings power and the case for modest price target upgrades.
• Ongoing share repurchases, while maintaining stable capital ratios, are viewed as a supportive capital return strategy that can enhance per share growth and partially offset elevated valuation multiples.
• Several models have been revised to reflect higher assets under management and a more constructive market backdrop. If this trend is sustained, it would underpin continued growth in fee based revenues and support current valuation levels.

Bearish Takeaways

• Bearish analysts caution that the recent surge in capital markets activity, particularly capital raising and M&A, may be unsustainably robust. This introduces downside risk to revenues if volumes normalize.
• Some see Raymond James' disciplined approach to growth as contributing to slower expansion versus peers, which could limit multiple expansion and keep the shares anchored near current valuation ranges.
• Concerns around a more expensive entry point, coupled with the potential for lower interest rates, create a less favorable near term risk reward profile despite solid underlying fundamentals.
• With valuations already elevated across capital markets and wealth management peers, and with no clear near term catalyst, execution will need to remain strong to justify further upside to current price targets.

What's in the News

• Board of Directors authorized a new share repurchase program of up to $2 billion with no expiration date, reinforcing Raymond James Financial's commitment to ongoing capital returns (company announcement).
• Board approved an 8% increase in the quarterly common stock dividend to $0.54 per share, payable January 16, 2026. This reflects confidence in sustainable earnings power (company announcement).
• Company will redeem all 80,500 outstanding shares of its 6.375% Series B Non Cumulative Perpetual Preferred Stock and related depositary shares on January 2, 2026. This is expected to simplify the capital structure and remove a higher cost layer of capital (company announcement).
• Management reiterated its focus on deploying capital first into organic growth and selectively into strategic acquisitions that meet strict cultural, strategic, and return thresholds. This signals openness to M&A while maintaining discipline (management commentary).
• From July 1, 2025 to September 30, 2025, Raymond James repurchased about 2.1 million shares for $350.02 million, completing a 7.4 million share, $1.10 billion buyback under the prior authorization. This highlights consistent execution on repurchase plans (company disclosure).

Valuation Changes

• The Fair Value Estimate has edged down slightly to approximately $183.27 from about $183.80, reflecting modestly more conservative assumptions.
• The Discount Rate has decreased marginally to roughly 8.57% from about 8.60%, indicating a slightly lower perceived risk profile.
• Revenue Growth has been revised down modestly to about 8.85% from roughly 9.20%, signaling somewhat softer top line expectations.
• The Net Profit Margin has risen slightly to approximately 15.96% from about 15.76%, incorporating improved profitability assumptions.
• The Future P/E has ticked down modestly to around 14.07x from approximately 14.16x, suggesting a slightly less demanding valuation multiple.