Is It Too Late To Consider Stifel Financial After Its 165.7% Five Year Surge?

• If you have been wondering whether Stifel Financial at around $122.98 is still good value after a big multi year run, you are not alone. This article will unpack what the current price really implies.
• The stock is up 1.5% over the last week, 3.2% over the past month, 15.9% year to date, and 165.7% over five years, signaling that the market has steadily upgraded its view of the business and its prospects.
• Recent attention on Stifel has centered on its continued expansion of wealth management and advisory capabilities, alongside strategic investments aimed at deepening its presence with high net worth and institutional clients. That combination has reinforced the story of a more diversified, fee driven franchise that can potentially smooth out market cyclicality.
• On our framework of six valuation checks, Stifel Financial scores just 2 out of 6. This suggests some parts of the market are already pricing in a lot of good news. Next we will break down how different valuation methods see the stock today and then finish with a more intuitive way to decide whether the current price really makes sense for you.

Stifel Financial scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Stifel Financial Excess Returns Analysis

The Excess Returns model asks whether Stifel Financial is earning enough on its shareholders equity, after covering its cost of capital, to justify the current share price. Instead of focusing on near term earnings, it looks at how much value the company can create over time from each dollar of book value.

For Stifel, the model assumes a Book Value of $49.74 per share and a Stable EPS of $5.30 per share, based on the median return on equity from the past five years. With an Average Return on Equity of 11.62% and a Cost of Equity of $3.91 per share, the Excess Return comes out to $1.39 per share, indicating value creation above the required return. The Stable Book Value is set at $45.61 per share, again anchored to historical medians.

Combining these inputs, the Excess Returns valuation estimates an intrinsic value of about $71.73 per share. At a market price around $122.98, the shares screen as roughly 71.4% overvalued on this framework.

Result: OVERVALUED

Our Excess Returns analysis suggests Stifel Financial may be overvalued by 71.4%. Discover 920 undervalued stocks or create your own screener to find better value opportunities.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Stifel Financial.

Approach 2: Stifel Financial Price vs Earnings

For a consistently profitable company like Stifel Financial, the price to earnings (PE) ratio is a useful way to translate market expectations into a single, intuitive number. It links what investors pay today to the earnings the business is already generating, which tends to be more stable than revenue for financial firms.

In general, faster growth and lower risk justify a higher PE multiple. In contrast, slower growth, more cyclical earnings or higher uncertainty should command a lower PE. Stifel currently trades on a PE of about 20.0x, slightly below the Capital Markets industry average of roughly 23.8x and close to the peer group average of about 20.6x. This suggests the market is pricing it as a solid but not standout name in its space.

Simply Wall St also estimates a proprietary Fair Ratio for Stifel of 16.0x. This is designed to be more tailored than simple peer or industry comparisons, because it explicitly factors in the company’s earnings growth profile, risk characteristics, profit margins, industry and market cap. On that basis, the current 20.0x PE sits well above the Fair Ratio, indicating the shares look expensive on an earnings multiple view.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your Stifel Financial Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple way to turn your view of Stifel Financial into a structured story that links what the business is doing to a transparent financial forecast, and then to your own estimate of fair value.

On Simply Wall St’s Community page, Narratives let you spell out how you think revenue, earnings and profit margins might evolve. The platform automatically turns those assumptions into a fair value you can compare against today’s share price to help you decide whether Stifel looks like a buy, hold, or sell for you.

Because Narratives are dynamic, they update as new information such as earnings, news, or share repurchases comes in. This means your fair value can shift with the story rather than staying frozen in a static model.

For example, some investors might build a more optimistic Stifel Narrative that leans on continued adviser recruitment, rising margins and a fair value closer to about $131 per share. More cautious investors could anchor on slower growth, lower future PE multiples and a fair value nearer $105, with both perspectives coexisting side by side in the Community for you to compare.

Do you think there's more to the story for Stifel Financial? Head over to our Community to see what others are saying!

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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