Back to top

Analyst Blog

On Apr 2, 2013, we maintained our Neutral recommendation on Raymond James Financial, Inc. (RJF - Analyst Report) based on its inorganic growth prospects and meaningful capital deployment actions. However, escalating expenses and a stringent regulatory landscape remain the major causes of concern for this Zacks Rank #3 (Hold) stock.

Why the Neutral Stance?

Over the past 60 days, there was a marginal upward estimate revision for 2013. Further, estimates for 2014 have slightly improved over the same period.

The Zacks Consensus Estimate for fiscal second quarter 2013 is pegged at 75 cents along with a revenue estimate of $1,114 million. The company delivered better-than-expected fiscal first-quarter earnings on the back of an augmented top line, partially offset by higher expenses.

Further, focus on inorganic growth, history of boosting shareholders’ value through meaningful capital deployment activities along with a stable liquidity position are the positives for Raymond James. The acquisitions of ClariVest Asset Management, LLC, Morgan Keegan and MK Holding from Regions Financial Corporation (RF - Analyst Report) will considerably expand its brokerage and capital markets operations. Going forward, Raymond James is expected to pursue more acquisitions.

However, escalating operating expenses remain a major concern for Raymond James. Increasing compensation costs along with a spurt in acquisitions are expected to further elevate expenses, thus pressurizing the bottom line. In addition, the company’s profitability remains vulnerable to the stringent regulatory landscape and absence of geographical diversification.

Other Stocks to Consider

Other banking stocks that are performing well and are worth considering include Duff & Phelps Corporation and Knight Capital Group, Inc. (KCG - Snapshot Report). While Duff & Phelps holds a Zacks Rank #1 (Strong Buy), Knight Capital carries 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
UTD THERAPE… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%