We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
What's in Store for Raymond James (RJF) in Q1 Earnings?
Read MoreHide Full Article
Raymond James (RJF - Free Report) is slated to announce first-quarter fiscal 2022 (ended Dec 31, 2021) results on Jan 26, after market close. Its earnings and revenues are expected to have witnessed growth in the quarter on a year-over-year basis.
In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate. Results benefited from robust Capital Markets and Asset Management segments’ performance, lower provisions, and a rise in assets balance. These were partly offset by higher expenses.
Raymond James has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the surprise being 21.7%, on average.
Raymond James Financial, Inc. Price and EPS Surprise
The Zacks Consensus Estimate for the company’s fiscal first-quarter earnings is pegged at $1.77 per share, which has been unchanged over the past seven days. The figure indicates a rise of 18.8% from the year-ago quarter’s reported number. The consensus estimate for sales of $2.67 billion suggests 20.2% year-over-year growth.
Factors to Note for Q1
Trading Revenues: Unlike 2020 and the first few months of 2021, wherein significant market volatility and client activity supported trading revenues; relatively normalized markets are expected to have dampened overall trading business this time around. Thus, Raymond James’ trading revenues are likely to have been subdued in the to-be-reported quarter.
Investment Banking (IB) Fees: Continued momentum in the IPO market and a steady rise in follow-up equity issuances were witnessed in the to-be-reported quarter. Also, bond issuance volumes remained decent. Thus, Raymond James’ underwriting fees are expected to have been positively impacted in the quarter.
Like the last few quarters, the December-end quarter continued to witness a rapid pace of deal-making across the globe, with both deal volume and value witnessing significant growth. This was primarily driven by the resumption of normal business activities, excess liquidity levels, companies’ appetite for strengthening scale and market share, and solid economic recovery. Thus, Raymond James’ advisory fees are likely to have improved.
The consensus estimate for IB fees is pegged at $312 million, suggesting 19.5% growth on a year-over-year basis.
Interest Income: The overall loan demand was quite impressive in the quarter under review. Thus, despite the continued low-interest-rate environment, Raymond James’ interest income is expected to have improved somewhat, supported by decent loan growth.
The company expects Raymond James Bank's net interest margin to be around 1.90% in first-quarter fiscal 2022.
Expenses: Raymond James consistently hires advisors and invests in franchises and thus, overall expenses are expected to have risen in the quarter. Moreover, due to a highly competitive environment, costs are expected to have been elevated.
Key Development in Q1
In October, Raymond James announced a deal to acquire TriState Capital Holdings, Inc., with an aim to further diversify its deposit gathering capabilities and revenue mix. The closure of the deal is expected this year.
Supported by a digital lending platform and a solid risk management technology system, TriState Capital provides securities-based loans (SBL) to high-net-worth borrowers across the United States. Following the deal closure, Raymond James’ SBL balance is likely to be 33% of net loans (on a pro-forma basis).
In the first full year post-completion, the transaction is anticipated to be accretive to earnings (excluding acquisition-related charges), with more than 8% accretive to earnings after the third year. After assuming share repurchases to offset shares issued as part of the deal post-closure, accretion projections improve 400 basis points.
What the Zacks Model Predicts
Our proven model does not conclusively predict an earnings beat for Raymond James this time around. This is because it does not have the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or better.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for Raymond James is 0.00%.
Zacks Rank: The company currently carries a Zacks Rank #2 (Buy).
Stocks Worth a Look
A few finance stocks, which you may want to consider as these have the right combination of elements to post an earnings beat in their upcoming releases per our model, are Prosperity Bancshares (PB - Free Report) , LendingClub Corporation (LC - Free Report) and Ares Capital Corporation (ARCC - Free Report) .
Prosperity Bancshares is slated to report quarterly earnings on Jan 26. PB, which carries a Zacks Rank of 3 at present, has an Earnings ESP of +0.55%.
LendingClub is also slated to report quarterly earnings on Jan 26. LC, which sports a Zacks Rank #1 (Strong Buy) at present, has an Earnings ESP of +7.81%.
Image: Bigstock
What's in Store for Raymond James (RJF) in Q1 Earnings?
Raymond James (RJF - Free Report) is slated to announce first-quarter fiscal 2022 (ended Dec 31, 2021) results on Jan 26, after market close. Its earnings and revenues are expected to have witnessed growth in the quarter on a year-over-year basis.
In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate. Results benefited from robust Capital Markets and Asset Management segments’ performance, lower provisions, and a rise in assets balance. These were partly offset by higher expenses.
Raymond James has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the surprise being 21.7%, on average.
Raymond James Financial, Inc. Price and EPS Surprise
Raymond James Financial, Inc. price-eps-surprise | Raymond James Financial, Inc. Quote
The Zacks Consensus Estimate for the company’s fiscal first-quarter earnings is pegged at $1.77 per share, which has been unchanged over the past seven days. The figure indicates a rise of 18.8% from the year-ago quarter’s reported number. The consensus estimate for sales of $2.67 billion suggests 20.2% year-over-year growth.
Factors to Note for Q1
Trading Revenues: Unlike 2020 and the first few months of 2021, wherein significant market volatility and client activity supported trading revenues; relatively normalized markets are expected to have dampened overall trading business this time around. Thus, Raymond James’ trading revenues are likely to have been subdued in the to-be-reported quarter.
Investment Banking (IB) Fees: Continued momentum in the IPO market and a steady rise in follow-up equity issuances were witnessed in the to-be-reported quarter. Also, bond issuance volumes remained decent. Thus, Raymond James’ underwriting fees are expected to have been positively impacted in the quarter.
Like the last few quarters, the December-end quarter continued to witness a rapid pace of deal-making across the globe, with both deal volume and value witnessing significant growth. This was primarily driven by the resumption of normal business activities, excess liquidity levels, companies’ appetite for strengthening scale and market share, and solid economic recovery. Thus, Raymond James’ advisory fees are likely to have improved.
The consensus estimate for IB fees is pegged at $312 million, suggesting 19.5% growth on a year-over-year basis.
Interest Income: The overall loan demand was quite impressive in the quarter under review. Thus, despite the continued low-interest-rate environment, Raymond James’ interest income is expected to have improved somewhat, supported by decent loan growth.
The company expects Raymond James Bank's net interest margin to be around 1.90% in first-quarter fiscal 2022.
Expenses: Raymond James consistently hires advisors and invests in franchises and thus, overall expenses are expected to have risen in the quarter. Moreover, due to a highly competitive environment, costs are expected to have been elevated.
Key Development in Q1
In October, Raymond James announced a deal to acquire TriState Capital Holdings, Inc., with an aim to further diversify its deposit gathering capabilities and revenue mix. The closure of the deal is expected this year.
Supported by a digital lending platform and a solid risk management technology system, TriState Capital provides securities-based loans (SBL) to high-net-worth borrowers across the United States. Following the deal closure, Raymond James’ SBL balance is likely to be 33% of net loans (on a pro-forma basis).
In the first full year post-completion, the transaction is anticipated to be accretive to earnings (excluding acquisition-related charges), with more than 8% accretive to earnings after the third year. After assuming share repurchases to offset shares issued as part of the deal post-closure, accretion projections improve 400 basis points.
What the Zacks Model Predicts
Our proven model does not conclusively predict an earnings beat for Raymond James this time around. This is because it does not have the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or better.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for Raymond James is 0.00%.
Zacks Rank: The company currently carries a Zacks Rank #2 (Buy).
Stocks Worth a Look
A few finance stocks, which you may want to consider as these have the right combination of elements to post an earnings beat in their upcoming releases per our model, are Prosperity Bancshares (PB - Free Report) , LendingClub Corporation (LC - Free Report) and Ares Capital Corporation (ARCC - Free Report) .
Prosperity Bancshares is slated to report quarterly earnings on Jan 26. PB, which carries a Zacks Rank of 3 at present, has an Earnings ESP of +0.55%.
LendingClub is also slated to report quarterly earnings on Jan 26. LC, which sports a Zacks Rank #1 (Strong Buy) at present, has an Earnings ESP of +7.81%.
Ares Capital is slated to report quarterly results on Feb 9. ARCC currently has an Earnings ESP of +11.11% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.