On Tuesday, JPMorgan initiated coverage of Stifel Financial (NYSE:SF) stock with a Neutral rating and a price target of $120.00. The firm highlighted the company's well-managed operations across its Wealth and Institutional segments, suggesting a potential for a balanced earnings stream through economic cycles.
According to InvestingPro data, Stifel currently trades at an attractive PEG ratio of 0.68, indicating the stock may be undervalued relative to its growth prospects.
Stifel Financial's Wealth and Institutional segments have demonstrated robust performance in recent years, benefiting from higher interest income. This is evidenced by the company's impressive 94.62% gross profit margin and 9.78% revenue growth over the last twelve months.
Looking ahead to 2025, the company is expected to take advantage of an improving investment banking environment. The Institutional segment, in particular, is anticipated to experience a cyclical upswing.
The company's Wealth segment is also expected to continue its growth trajectory, with secular drivers supporting its medium-term outlook, even as the market prepares for prospective rate normalization. Stifel's fee-based assets have seen a compound annual growth rate (CAGR) in the mid-teens since 2018, indicating a strong upward momentum. This has been partly attributed to the company's success in attracting high-performing advisor teams.
Despite the positive outlook on Stifel Financial's ability to generate steady earnings growth, JPMorgan noted that the stock's recent appreciation and current valuation levels may have set high expectations among investors. The stock has indeed shown remarkable performance, with a 73.96% return over the past year.
For deeper insights into Stifel's valuation and growth prospects, InvestingPro subscribers can access comprehensive analysis including 8 additional ProTips and detailed financial metrics in the Pro Research Report.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.