Stifel Financial (SF): Examining Valuation Following a Year of Steady Returns

Stifel Financial (SF) has shown a steady pattern in recent trading, and its performance over the past year has caught the attention of investors interested in financial sector value plays. The company’s long-term returns remain a focus.

See our latest analysis for Stifel Financial.

Stifel Financial’s share price has seen only mild moves lately, but the bigger picture is much more compelling. While the most recent price activity has been quiet, the stock’s 1-year total shareholder return of 20.3% points to meaningful momentum building beneath the surface.

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With strong returns in the rearview mirror and current prices sitting about 13 percent below analyst targets, it is worth asking: is Stifel Financial’s stock actually undervalued, or is the market already pricing in all its future growth?

Most Popular Narrative: 11.6% Undervalued

The consensus narrative now pegs Stifel Financial’s fair value at $126.83, suggesting meaningful upside from the last close of $112.09. Analysts have raised projections, pointing to a refreshed growth outlook that could recast expectations for the stock.

The firm’s strong pipelines in financial advisory and institutional banking, particularly in sectors such as technology and industrial services, as well as a growing appetite for bank M&A, suggest potential for increased investment banking revenue as market conditions stabilize. Stifel's strategic flexibility to prioritize share repurchases over loan growth reflects an opportunity to enhance earnings per share (EPS) and returns on investment, given current market conditions and undervalued stock prices.

Read the complete narrative.

What is driving this valuation upgrade? Analysts are considering a sharp acceleration in future profit margins and a revenue growth pace that could draw attention from competitors. There is a financial element embedded in their projections that could change how the market prices the company. Find out what ambitious assumptions are included in this narrative.

Result: Fair Value of $126.83 (UNDERVALUED)

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

However, ongoing legal expenses and persistent market volatility could quickly shift the outlook if conditions deteriorate or liabilities increase.

Find out about the key risks to this Stifel Financial narrative.

Another View: What Does the SWS DCF Model Suggest?

While analysts see upside based on expected earnings and revenue growth, our DCF model offers a more cautious perspective. It estimates Stifel Financial's fair value at $69.48, which is below the recent market price. This suggests downside risk if growth projections fall short. Can the company's fundamentals live up to analyst optimism?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Stifel Financial for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Stifel Financial Narrative

If you think a different perspective is needed or want to explore the figures your own way, you can create a custom narrative quickly using Do it your way.

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding Stifel 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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