Increasing Our Fair Value Estimate for Raymond James to $111; Shares Fairly Valued

We are increasing our fair value estimate for no-moat Raymond James Financial to $111 per share from $100, which implies a forward price/earnings ratio of about 8.5 times and a price/book ratio of 2.5 times. Of the net $11 increase in our fair value estimate, about $5 is for earnings since our previous valuation update, $2 is for changes in our revenue forecast, and $4 is from an increase in our long-run operating margin assumption. We assess shares are currently fairly valued.