We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Raymond James' (RJF) Q3 Earnings Beat, Revenues Rise Y/Y
Read MoreHide Full Article
Raymond James’ (RJF - Free Report) third-quarter fiscal 2024 (ended Jun 30) adjusted earnings of $2.39 per share surpassed the Zacks Consensus Estimate of $2.31. The bottom line surged 29% from the prior-year quarter.
Results benefited from robust investment banking and brokerage performance in the Capital markets segment. The performance of the Private Client Group and the Asset Management segments was also solid. The acquisitions over the past years supported the company’s financials. Further, RJF recorded a provision benefit for the quarter. However, higher non-interest expenses acted as a headwind.
Net income available to common shareholders (GAAP basis) was $491 million or $2.31 per share, up from $369 million or $1.71 per share in the prior-year quarter.
Revenues Improve, Costs Rise
Net revenues were $3.23 billion, up 11% year over year. The top line outpaced the Zacks Consensus Estimate of $3.21 billion.
Segment-wise, in the reported quarter, the Private Client Group recorded 11% growth in net revenues, Asset Management’s net revenues rose 17% and Capital Markets’ top line increased 20%. Further, Others witnessed an 87% jump in revenues. On the other hand, Bank registered a fall of 19% from the prior year's net revenues.
Non-interest expenses rose 7% year over year to $2.58 billion. The increase was largely due to higher compensation, commissions and benefits costs and investment sub-advisory fees. Our estimate for non-interest expenses was the same as the reported number. Also, RJF recorded a bank loan benefit for credit losses of $10 million.
As of Jun 30, 2024, client assets under administration were $1.48 trillion, up 15% from the end of the prior-year quarter. Financial assets under management of $229.3 billion grew 14%. Our estimates for client assets under administration and financial assets under management were $1.45 trillion and $221.4 billion, respectively.
Balance Sheet & Capital Ratios Strong
As of Jun 30, 2024, Raymond James has total assets of $80.63 billion, down 1% from the prior quarter. Total equity rose 2% sequentially to $11.12 billion.
Book value per share was $54.08, up from $47.34 as of Jun 30, 2023.
As of Jun 30, 2024, the total capital ratio was 23.6% compared with 22% as of Jun 30, 2023. The Tier 1 capital ratio was 22.2% compared with 20.6% as of June 2023-end.
Return on common equity (annualized basis) was 17.8% at the end of the reported quarter compared with 14.9% a year ago.
Share Repurchase Update
In the reported quarter, RJF repurchased 2 million shares for $243 million.
As of Jun 30, 2024, $945 million remained under the buyback authorization.
Our View
Raymond James’ global diversification efforts, strategic acquisitions and higher rates are expected to support top-line growth. However, elevated operating expenses and the volatile nature of capital markets businesses are concerns.
Raymond James Financial, Inc. Price, Consensus and EPS Surprise
Jefferies Financial’s (JEF - Free Report) second-quarter fiscal 2024 (ended May 31) earnings of 67 cents per share surpassed the Zacks Consensus Estimate of 63 cents. In the prior-year quarter, the company recorded adjusted earnings of 29 cents.
Results primarily benefited from an improvement in net revenues. The performance of the reportable segments was also strong. However, higher expenses hurt JEF’s results to some extent.
Morgan Stanley’s (MS - Free Report) second-quarter 2024 earnings of $1.82 per share handily outpaced the Zacks Consensus Estimate of $1.65. The bottom line also compared favorably with $1.24 per share reported in the prior-year quarter.
Results benefited from the rebound in the IB business, solid trading business and lower provisions. However, a fall in net interest income and weakness in the wealth management business were the undermining factors for MS.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Raymond James' (RJF) Q3 Earnings Beat, Revenues Rise Y/Y
Raymond James’ (RJF - Free Report) third-quarter fiscal 2024 (ended Jun 30) adjusted earnings of $2.39 per share surpassed the Zacks Consensus Estimate of $2.31. The bottom line surged 29% from the prior-year quarter.
Results benefited from robust investment banking and brokerage performance in the Capital markets segment. The performance of the Private Client Group and the Asset Management segments was also solid. The acquisitions over the past years supported the company’s financials. Further, RJF recorded a provision benefit for the quarter. However, higher non-interest expenses acted as a headwind.
Net income available to common shareholders (GAAP basis) was $491 million or $2.31 per share, up from $369 million or $1.71 per share in the prior-year quarter.
Revenues Improve, Costs Rise
Net revenues were $3.23 billion, up 11% year over year. The top line outpaced the Zacks Consensus Estimate of $3.21 billion.
Segment-wise, in the reported quarter, the Private Client Group recorded 11% growth in net revenues, Asset Management’s net revenues rose 17% and Capital Markets’ top line increased 20%. Further, Others witnessed an 87% jump in revenues. On the other hand, Bank registered a fall of 19% from the prior year's net revenues.
Non-interest expenses rose 7% year over year to $2.58 billion. The increase was largely due to higher compensation, commissions and benefits costs and investment sub-advisory fees. Our estimate for non-interest expenses was the same as the reported number. Also, RJF recorded a bank loan benefit for credit losses of $10 million.
As of Jun 30, 2024, client assets under administration were $1.48 trillion, up 15% from the end of the prior-year quarter. Financial assets under management of $229.3 billion grew 14%. Our estimates for client assets under administration and financial assets under management were $1.45 trillion and $221.4 billion, respectively.
Balance Sheet & Capital Ratios Strong
As of Jun 30, 2024, Raymond James has total assets of $80.63 billion, down 1% from the prior quarter. Total equity rose 2% sequentially to $11.12 billion.
Book value per share was $54.08, up from $47.34 as of Jun 30, 2023.
As of Jun 30, 2024, the total capital ratio was 23.6% compared with 22% as of Jun 30, 2023. The Tier 1 capital ratio was 22.2% compared with 20.6% as of June 2023-end.
Return on common equity (annualized basis) was 17.8% at the end of the reported quarter compared with 14.9% a year ago.
Share Repurchase Update
In the reported quarter, RJF repurchased 2 million shares for $243 million.
As of Jun 30, 2024, $945 million remained under the buyback authorization.
Our View
Raymond James’ global diversification efforts, strategic acquisitions and higher rates are expected to support top-line growth. However, elevated operating expenses and the volatile nature of capital markets businesses are concerns.
Raymond James Financial, Inc. Price, Consensus and EPS Surprise
Raymond James Financial, Inc. price-consensus-eps-surprise-chart | Raymond James Financial, Inc. Quote
Currently, Raymond James carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Investment Banks
Jefferies Financial’s (JEF - Free Report) second-quarter fiscal 2024 (ended May 31) earnings of 67 cents per share surpassed the Zacks Consensus Estimate of 63 cents. In the prior-year quarter, the company recorded adjusted earnings of 29 cents.
Results primarily benefited from an improvement in net revenues. The performance of the reportable segments was also strong. However, higher expenses hurt JEF’s results to some extent.
Morgan Stanley’s (MS - Free Report) second-quarter 2024 earnings of $1.82 per share handily outpaced the Zacks Consensus Estimate of $1.65. The bottom line also compared favorably with $1.24 per share reported in the prior-year quarter.
Results benefited from the rebound in the IB business, solid trading business and lower provisions. However, a fall in net interest income and weakness in the wealth management business were the undermining factors for MS.