Raymond James Financial (RJF): Reassessing Valuation After Series B Redemption and Goldman Sachs Conviction List Exit

Raymond James Financial (RJF) is shaking up its capital structure by redeeming its 6.375% Series B preferred shares and being removed from the Goldman Sachs US Conviction List, a one two combination investors should unpack.

See our latest analysis for Raymond James Financial.

Those moves come after a choppier stretch for the stock, with a recent 1 day share price return of 2.02 percent lifting Raymond James Financial to 158.79 dollars. Its 1 year total shareholder return is modestly negative, but the 5 year total shareholder return of 176.36 percent still points to substantial long term value creation, suggesting near term momentum is rebuilding after a softer patch.

If this kind of capital structure reset has you rethinking your financials exposure, it could be a smart moment to scan fast growing stocks with high insider ownership for other compelling ideas.

With analysts still seeing around 16 percent upside and our models implying an even steeper intrinsic discount, the question now is simple: Is Raymond James undervalued, or is the market already pricing in its next leg of growth?

Most Popular Narrative Narrative: 13.6% Undervalued

With Raymond James Financial last closing at $158.79 against a narrative fair value of $183.80, the implied upside rests on sustained profitable growth and capital discipline.

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%.

Read the complete narrative.

Curious how steady mid single digit growth assumptions, margin uplift and shrinking share count combine to justify that higher valuation base? The narrative stitches those moving parts into a surprisingly punchy earnings trajectory and a future multiple that challenges how investors usually price diversified financials.

Result: Fair Value of $183.80 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent market volatility and a prolonged slowdown in capital markets activity could easily derail the current upside narrative for Raymond James Financial.

Find out about the key risks to this Raymond James Financial narrative.

Build Your Own Raymond James Financial Narrative

If you see the story differently or want to stress test the assumptions yourself, you can build a fresh narrative in just minutes: Do it your way

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding Raymond James Financial.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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