Bullish indicating open at $55-$60, IPO prices at $37
On Wednesday, Keefe, Bruyette & Woods analysts reaffirmed a Market Perform rating on Raymond (NSE:RYMD) James stock, maintaining a $158.00 price target. The announcement comes as Raymond James prepares for its 2025 Analyst & Investor Day, scheduled for Thursday, June 5th.
The analysts expect Raymond James to discuss its capital priorities and financial guidance metrics during the event. The focus will likely be on pre-tax margin and compensation ratio updates. The company concluded its fiscal second quarter of 2025 with a Tier 1 leverage ratio of 13.3%, exceeding its medium-term target of 10%. According to InvestingPro, the company maintains an impressive 41-year track record of consistent dividend payments, with a recent dividend growth of 11.1%.
In the previous year’s investor day, Raymond James provided financial guidance that included an adjusted pre-tax margin of over 20%. This figure, viewed as conservative by the analysts at the time, was surpassed as the company’s pre-tax margin averaged 21.4% over the past four quarters. This performance was attributed to strong capital markets results, with InvestingPro data showing revenue growth of 13.4% and an overall financial health score of "GREAT."
Raymond James also maintained a compensation ratio target of less than 65% during the last investor day, with the actual ratio coming in at 63.7% on a next twelve months basis. This marked the third consecutive year, from 2021 to 2023, that the company exceeded its compensation ratio target. Analysts anticipate that management will continue to set conservative targets moving forward. InvestingPro analysis suggests the stock is currently undervalued, with additional insights available in the comprehensive Pro Research Report.
In other recent news, Raymond James Financial (NYSE:RJF) reported its second-quarter fiscal 2025 earnings, revealing a slight miss on both earnings per share (EPS) and revenue compared to Wall Street expectations. The company’s EPS was $2.42, below the forecasted $2.50, while revenue stood at $3.4 billion, missing the anticipated $3.45 billion. Despite these figures, Raymond James demonstrated strong overall performance, achieving net revenues of $6.9 billion and a pretax income of $1.4 billion for the first half of fiscal 2025, marking a significant year-over-year increase in pretax income for the second quarter.
Analyst Devin Ryan from Citizens JMP maintained a Market Outperform rating for Raymond James, setting a $175 price target, reflecting confidence in the company’s performance. The analyst noted that Raymond James’ operating EPS of $2.43 slightly surpassed his projection of $2.39. Revenue for the quarter was $3.4 billion, $20 million higher than anticipated, with non-compensation costs reported to be $27 million lower than expected.
Raymond James announced new AI initiatives and leadership roles aimed at enhancing client service, indicating a strategic focus on technology deployment. CEO Paul Shickry emphasized the firm’s commitment to strengthening its unique culture and enhancing its platform for financial professionals. The company also expects relatively flat asset management fees in the third quarter and plans to invest in technology and platform capabilities, targeting $400-$500 million in quarterly share buybacks.
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