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Why You Should Bet on Raymond James' (RJF) Growth Potential

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Trades from $3

On Nov 9, 2016, we issued an updated research report on Raymond James Financial, Inc. (RJF - Free Report) . The company’s strategic acquisitions, supported by a strong liquidity position and loan growth, poise it well for top-line growth. However, rising expenses pose a concern.

Raymond James’ Private Client Group segment has been performing well even in a competitive environment. Notably, the segments’ total revenue has been witnessing improvements. The revenues have grown at a CAGR of 7.4% over the past four fiscal years (2013–2016).

Supported by the acquisitions, the company’s growth prospects look encouraging. Notably, in September, it acquired the U.S. Private Client Services unit of Deutsche Asset & Wealth Management which is expected to further boost performance. Earlier this year, the company also announced the acquisition of Germany-based Mummert & Company Corporate Finance GmbH and MacDougall, MacDougall & MacTier Inc., an independent Canadian investment firm. These acquisitions are expected to further support its growth in the long run.

Moreover, the company’s continued loan growth is expected to enhance profitability. Notably, total loans have grown at a CAGR of 17.5% over the past five fiscal years (2012–2016).

Further, the company remains committed toward enhancing shareholder value through share buybacks and dividend hikes.

However, rising expenses, adverse impact of financial reform laws on the company’s bottom line and increased reliance on U.S. operations remain matters of concern.

Shares of Raymond James have gained approximately 17.3% in the past three months.
 

Over the past 60 days, the Zacks Consensus Estimate has been revised upward by nearly 2.4% to $4.20 per share for fiscal 2017 and 4.7% to $4.50 per share for fiscal 2018.

Currently, Raymond James carries a Zacks Rank #2 (Buy).  
 
Other Stocks to Consider

Other stocks in the finance space worth a look include Carolina Financial Corporation (CARO - Free Report) , Evercore Partners Inc. (EVR - Free Report) and The Goldman Sachs Group, Inc. (GS - Free Report) .

Carolina witnessed an upward earnings estimate revision of 12.9% over the past 30 days. Its share price has risen 31.4% year to date. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Evercore Partners currently carries a Zacks Rank #2. Over the past 30 days, its Zacks Consensus Estimate has been revised 4% upward. Its share price has increased 7.7% year to date.

Goldman Sachs also carries a Zacks Rank #2. It has witnessed an upward earnings estimate revision of 4.9% over the past 30 days, while its share price is up 6.9% year to date.

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