Analyst Note| Michael Wong, CFA, CPA |
Stifel Financial’s revenue and earnings are holding up well so far, as wealth management has largely recovered and its institutional securities business benefits from industrywide strong capital raising and trading activity. The company reported net income to common shareholders of $111 million, or $1.46 per diluted share, on $883 million of net revenue. Net revenue increased 7.5% from a year ago but decreased 1.4% sequentially. Revenue growth from the previous year came primarily from trading and capital raising, while acquisition advisory and net interest income declined. The sequential decline is from lower trading and net interest income. For the quarter, the company had a return on common equity of 12.8% and a return on tangible common equity of 20.4%. We don’t anticipate making a material change to our $59 fair value estimate for no-moat Stifel and assess shares are fairly valued.