CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
After earnings beat, we raise our target by $12 to $110, using a forward P/E of 11.5x our FY 24 (Sep.) EPS estimate, a slight discount to RJF’s five-year average of 12.7x as a likely recovery within Capital Markets is partially offset by weaker net interest income (NII) in ’24. We raise our FY 24 EPS estimate by $0.25 to $9.56 and start FY 25’s at $9.98. RJF posted FQ1 24 adjusted EPS of $2.40 vs. $2.29, a $0.14 consensus beat. Revenues rose 8% Y/Y on robust growth within Private Clients Group (PCG, +8% Y/Y), Capital Markets (CM, +15% Y/Y), and Asset Management (+14% Y/Y), partially offset by weaker results at RJ Bank (-13% Y/Y). PCG benefited from annualized net new asset growth of 8% and strong asset management fees (+13% Y/Y), with PCG AUM rising to $1.31T vs. $1.11T Y/Y. Recruitment was a bit disappointing, coming in flat at 8,710 vs. 8,699 advisors Y/Y. Firmwide NII fell 13% Y/Y as net interest margins contracted (2.97% vs. 3.19%), a trend we expect to continue in ’24 as we forecast NII declining 9%-11%.