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Raymond James' Q1 Earnings Beat, Stock Up on Solid IB Business
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Shares of Raymond James (RJF - Free Report) gained 1.3% in after-hours trading in response to better-than-expected first-quarter fiscal 2025 results (ended Dec. 31). Adjusted earnings of $2.93 per share handily surpassed the Zacks Consensus Estimate of $2.75. The bottom line surged 22% from the prior-year quarter.
See the Zacks Earnings Calendar to stay ahead of market-making news.
Results benefited from robust investment banking (IB) and brokerage performance in the Capital Markets segment. The performance of the Private Client Group and Asset Management segments was also solid. The acquisitions over the past years supported the company’s financials. However, higher non-interest expenses acted as a headwind.
Net income available to common shareholders (GAAP basis) was $599 million or $2.86 per share, up from $497 million or $2.32 per share in the prior-year quarter.
RJF’s Revenues Improve, Expenses Rise
Quarterly net revenues were $3.54 billion, up 17% year over year. The top line outpaced the Zacks Consensus Estimate of $3.48 billion.
Segment-wise, in the reported quarter, the Private Client Group recorded 14% growth in net revenues, Asset Management’s net revenues rose 25% and Capital Markets’ top line jumped 42%. On the other hand, Bank registered a fall of 4% from the prior year's net revenues and Others recorded a 54% plunge in net revenues.
Non-interest expenses rose 17% from the prior-year quarter to $2.79 billion. The increase was largely due to a jump in compensation, commissions and benefits costs and investment sub-advisory fees. Our estimate for non-interest expenses was $2.74 billion. Further, RJF did not record any bank loan provision for credit losses in the reported quarter against $12 million in the prior-year quarter.
As of Dec. 31, 2024, client assets under administration were $1.56 trillion, up 14% from the prior-year quarter. Financial assets under management of $243.9 billion grew 13%. Our estimates for client assets under administration and financial assets under management were $1.62 trillion and $245.4 billion, respectively.
RJF’s Balance Sheet & Capital Ratios Strong
As of Dec. 31, 2024, Raymond James has total assets of $82.28 billion, down 1% from the prior quarter. Total equity rose 2% to $11.84 billion.
Book value per share was $57.89, up from $51.32 as of Dec. 31, 2023.
As of Dec. 31, 2024, the total capital ratio was 25% compared with 23% as of Dec. 31, 2023. The Tier 1 capital ratio was 23.7% compared with 21.6% as of December 2023-end.
Return on common equity (annualized basis) was 20.4% at the end of the reported quarter compared with 19.1% a year ago.
Update on Raymond James’ Share Repurchases
In the reported quarter, RJF repurchased 0.3 million shares for $50 million.
In December 2024, the company announced a new share repurchase program, authorizing $1.5 billion. This replaced the previous buyback plan. As of Jan. 24, 2025, approximately $1.45 billion remained under the buyback authorization.
Our View on Raymond James
Raymond James’ global diversification efforts, strategic acquisitions and relatively high rates are expected to support top-line growth. However, elevated operating expenses and the volatile nature of capital markets businesses are concerns.
Raymond James Financial, Inc. Price, Consensus and EPS Surprise
Morgan Stanley’s (MS - Free Report) fourth-quarter 2024 earnings of $2.22 per share handily outpaced the Zacks Consensus Estimate of $1.65. The bottom line also rose substantially from 85 cents in the prior-year quarter.
Results benefited from the rebound in the IB business, solid trading business and a rise in net interest income. However, higher expenses and provisions were the undermining factors for MS.
Jefferies Financial Group’s (JEF - Free Report) fourth-quarter fiscal 2024 (ended Nov. 30) adjusted earnings from continuing operations of $1.05 per share surpassed the Zacks Consensus Estimate of 98 cents. The bottom line compared favorably with the prior-year quarter’s 30 cents.
Results benefited from solid improvement in IB business and higher capital markets revenues. The performance of JEF’s reportable segments was also strong. However, an increase in non-interest expenses was an undermining factor.
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Raymond James' Q1 Earnings Beat, Stock Up on Solid IB Business
Shares of Raymond James (RJF - Free Report) gained 1.3% in after-hours trading in response to better-than-expected first-quarter fiscal 2025 results (ended Dec. 31). Adjusted earnings of $2.93 per share handily surpassed the Zacks Consensus Estimate of $2.75. The bottom line surged 22% from the prior-year quarter.
See the Zacks Earnings Calendar to stay ahead of market-making news.
Results benefited from robust investment banking (IB) and brokerage performance in the Capital Markets segment. The performance of the Private Client Group and Asset Management segments was also solid. The acquisitions over the past years supported the company’s financials. However, higher non-interest expenses acted as a headwind.
Net income available to common shareholders (GAAP basis) was $599 million or $2.86 per share, up from $497 million or $2.32 per share in the prior-year quarter.
RJF’s Revenues Improve, Expenses Rise
Quarterly net revenues were $3.54 billion, up 17% year over year. The top line outpaced the Zacks Consensus Estimate of $3.48 billion.
Segment-wise, in the reported quarter, the Private Client Group recorded 14% growth in net revenues, Asset Management’s net revenues rose 25% and Capital Markets’ top line jumped 42%. On the other hand, Bank registered a fall of 4% from the prior year's net revenues and Others recorded a 54% plunge in net revenues.
Non-interest expenses rose 17% from the prior-year quarter to $2.79 billion. The increase was largely due to a jump in compensation, commissions and benefits costs and investment sub-advisory fees. Our estimate for non-interest expenses was $2.74 billion. Further, RJF did not record any bank loan provision for credit losses in the reported quarter against $12 million in the prior-year quarter.
As of Dec. 31, 2024, client assets under administration were $1.56 trillion, up 14% from the prior-year quarter. Financial assets under management of $243.9 billion grew 13%. Our estimates for client assets under administration and financial assets under management were $1.62 trillion and $245.4 billion, respectively.
RJF’s Balance Sheet & Capital Ratios Strong
As of Dec. 31, 2024, Raymond James has total assets of $82.28 billion, down 1% from the prior quarter. Total equity rose 2% to $11.84 billion.
Book value per share was $57.89, up from $51.32 as of Dec. 31, 2023.
As of Dec. 31, 2024, the total capital ratio was 25% compared with 23% as of Dec. 31, 2023. The Tier 1 capital ratio was 23.7% compared with 21.6% as of December 2023-end.
Return on common equity (annualized basis) was 20.4% at the end of the reported quarter compared with 19.1% a year ago.
Update on Raymond James’ Share Repurchases
In the reported quarter, RJF repurchased 0.3 million shares for $50 million.
In December 2024, the company announced a new share repurchase program, authorizing $1.5 billion. This replaced the previous buyback plan. As of Jan. 24, 2025, approximately $1.45 billion remained under the buyback authorization.
Our View on Raymond James
Raymond James’ global diversification efforts, strategic acquisitions and relatively high rates are expected to support top-line growth. However, elevated operating expenses and the volatile nature of capital markets businesses are concerns.
Raymond James Financial, Inc. Price, Consensus and EPS Surprise
Raymond James Financial, Inc. price-consensus-eps-surprise-chart | Raymond James Financial, Inc. Quote
Currently, Raymond James carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of RJF’s Peers
Morgan Stanley’s (MS - Free Report) fourth-quarter 2024 earnings of $2.22 per share handily outpaced the Zacks Consensus Estimate of $1.65. The bottom line also rose substantially from 85 cents in the prior-year quarter.
Results benefited from the rebound in the IB business, solid trading business and a rise in net interest income. However, higher expenses and provisions were the undermining factors for MS.
Jefferies Financial Group’s (JEF - Free Report) fourth-quarter fiscal 2024 (ended Nov. 30) adjusted earnings from continuing operations of $1.05 per share surpassed the Zacks Consensus Estimate of 98 cents. The bottom line compared favorably with the prior-year quarter’s 30 cents.
Results benefited from solid improvement in IB business and higher capital markets revenues. The performance of JEF’s reportable segments was also strong. However, an increase in non-interest expenses was an undermining factor.