A month has gone by since the last earnings report for Raymond James Financial, Inc. (RJF Quick QuoteRJF - Free Report) . Shares have added about 6.2% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Raymond James Financial, Inc. due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Raymond James Q1 Earnings Top Estimates, Revenues Up Y/Y

Raymond James’ first-quarter fiscal 2022 (ended Dec 31) adjusted earnings of $2.12 per share easily outpaced the Zacks Consensus Estimate of $1.77. The bottom line was up 42% from the prior-year quarter.

Results benefited from an impressive performance of the Capital Markets and Asset Management segments, which majorly drove revenues. A rise in assets balance, provision benefit and a strong balance sheet position were the other tailwinds. However, higher operating expenses posed an undermining factor.
 
Net income (GAAP basis) was $446 million or $2.10 per share, up from $312 million or $1.48 per share in the prior-year quarter.

Revenues & Costs Increase

Net revenues were $2.78 billion, increasing 25% year over year. The rise was driven by improvement in all revenue components, except other revenues. The top line also beat the Zacks Consensus Estimate of $2.67 billion.

Segment-wise, in the reported quarter, RJ Bank registered a rise of 10% from the prior year in net revenues. Also, Private Client Group and Asset Management recorded 25% and 21% growth, respectively, in revenues. Capital Markets’ top line surged 36% from the year-ago quarter. Others recorded negative revenues of $15 million against revenues of $4 million in the prior-year quarter.

Non-interest expenses increased 22% to $2.22 billion. The rise was mainly due to higher compensation, commissions and benefits, and business development charges and investment sub-advisory fees, which were partly offset by benefit from bank loan provision.

As of Dec 31, 2021, client assets under administration were $1.26 trillion, up 23% from the end of the prior-year quarter. Financial assets under management were $203.2 billion, up 20%.

Strong Balance Sheet & Capital Ratios

As of Dec 31, 2021, Raymond James reported total assets of $68.5 billion, up 11% sequentially. Total equity increased 4% from the fiscal third quarter to $8.6 billion.

Book value per share was $41.45, up from $35.73 as of Dec 31, 2020.

As of Dec 31, 2021, total capital ratio was 26.9% compared with 24.6% as of Dec 31, 2020. Tier 1 capital ratio was 25.8% compared with 23.4% as of December 2020-end.

Return on equity (annualized basis) was 21.2% at the end of the reported quarter compared with 17.2% a year ago.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates review.

VGM Scores

Currently, Raymond James Financial, Inc. has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Raymond James Financial, Inc. has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.