Wolfe Research raises Stifel stock rating, sets $108 target

On Thursday, Wolfe Research analyst Steven Chubak upgraded Stifel Financial shares, trading on the New York Stock Exchange under the ticker (NYSE:SF), from Peer Perform to Outperform, establishing a new price target of $108.00. Currently trading at $82.80 with a P/E ratio of 16.4x, InvestingPro analysis suggests the stock is undervalued. Chubak highlighted the company’s robust fundamentals, including low-to-mid single-digit percentage organic growth, solid net interest income (NII), favorable balance sheet trends, and a leading position in excess capital. The company maintains strong profitability with a gross profit margin of 91%.

Stifel Financial has effectively navigated cash sorting challenges compared to its peers through its SMART product, which represents approximately 55% of the company’s deposits. This product is expected to help mitigate the impact of interest rate headwinds as it reprices in line with Federal Funds rates. The company has demonstrated consistent shareholder returns, having raised its dividend for 8 consecutive years, with a current yield of 2.2%. Chubak noted that while the volatility of capital markets remains uncertain, Stifel could see increased activity in bank mergers and acquisitions, particularly benefiting from its KBW division.

The upgrade comes in the wake of a significant sell-off triggered by first-quarter earnings, which Chubak believes has resulted in an attractive valuation for Stifel Financial’s shares. The stock has declined nearly 20% over the past six months, yet maintains a strong return over the last five years. The current price, he suggests, is less than 10 times the firm’s projected earnings for 2026. The new price target of $108 implies a 30% upside potential from the stock’s current level. Chubak’s outlook for Stifel Financial is positive, considering the company’s capacity to leverage its strengths in the face of market challenges. For deeper insights into Stifel Financial’s valuation and growth prospects, including 8 additional exclusive ProTips, check out the comprehensive Pro Research Report available on InvestingPro.

In other recent news, Stifel Financial Corporation reported its Q1 2025 earnings, revealing a challenging quarter due to a significant legal charge. The company posted an earnings per share (EPS) of $0.49, which was substantially below the forecasted $1.74, and revenue of $1.26 billion, slightly under the expected $1.3 billion. Despite achieving record-high first-quarter revenue, the earnings were heavily impacted by a $180 million legal charge. Stifel maintains its financial guidance for 2025, expressing cautious optimism about market recovery later in the year. The company anticipates stronger performance in its financial advisory services and potential increased mergers and acquisitions (M&A) activity in the banking sector. Analysts from firms like Citi and TD Cowen have shown interest in Stifel’s recruiting strategy and the company’s potential for faster M&A deal closures. Stifel’s management highlighted its resilience and asset sensitivity, emphasizing a well-positioned balance sheet and liquidity to navigate through market volatility. The company remains optimistic about long-term growth, despite the current challenges and market uncertainties.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.