Back to top

Analyst Blog

On Jun 24, 2013, we downgraded our long-term recommendation on Raymond James Financial, Inc. (RJF - Analyst Report) to Underperform from Neutral. This was based on lower-than-expected fiscal second-quarter (ended Mar 31) results.

Why the Downgrade?

Raymond James’ earnings per share lagged the Zacks Consensus Estimate. Increased expenses were the primary dampener for the quarter, but the company witnessed improved top line. Notably, growth in assets under management (AUM) and assets under administration were among the positives.

Further, estimates over the past 60 days have been declining, with the Zacks Consensus Estimate for fiscal 2013 going down 9.4% to $2.78 per share. Moreover, for fiscal 2014, the Zacks Consensus Estimate declined fell 7.7% to $3.37 over the same time frame. Hence, with the estimates for both the years falling, Raymond James now has a Zacks Rank #4 (Sell).

Other Areas of Concern

Mounting operating expenses is another cause of concern for Raymond James. Due to acquisitions and a rise in compensation expenses, non-interest expenses are expected to increase further, thereby exerting additional pressure on the bottom line.

Moreover, Raymond James is yet to successfully expand its footprint globally. Though it does have operations outside the U.S., these are lesser in proportion. Hence, the sluggish economic recovery and low interest-rate environment in the U.S. could impact its financials.

Other Stocks Worth Considering

While we prefer to avoid Raymond James, other better performing investment brokers include Investment Technology Group Inc. (ITG) and Ladenburg Thalmann Financial Services Inc. (LTS) – with a Zacks Rank #1 (Strong Buy) as well as GAIN Capital Holdings, Inc. (GCAP) – a Zacks Rank #2 (Buy).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
SUPER MICRO… SMCI 27.00 +10.25%
CANADIAN SO… CSIQ 38.34 +8.18%
CENTURY ALU… CENX 26.97 +7.97%
WILLDAN GRO… WLDN 11.38 +5.86%
AROTECH COR… ARTX 3.78 +5.59%