Analyst Note| Michael Wong, CFA, CPA |
While Raymond James reported multiple record results for its fiscal first quarter (ending December), with some of its capital markets revenue lines also holding up better than peers, the company is unlikely to escape the modestly negative trends we envision for the industry overall. The firm reported record net income of $312 million, or $2.23 per diluted share, on record net revenue of $2.2 billion. Net revenue grew 11% year over year, with almost all revenue lines expanding except for those related to interest rates. These strong first-quarter results translated into a return on tangible equity of 19%. We are maintaining our $97 per share fair value estimate for no-moat Raymond James and assess the shares as fairly valued.