Raymond James Earnings: Signs of Caution and Slowing Growth

Raymond James Financial reported record quarterly net revenue for its second fiscal quarter ending in March, but there were signs of caution and slowing growth. The company reported net income to common shareholders of $425 million, or $1.93 per diluted share, on $2.87 billion of net revenue. Net revenue increased 7% from a year ago and 3% sequentially, as net interest income offset declines in investment banking, brokerage, and asset management fees from a year ago. There have been broad-based declines in revenue at Raymond James and its peers in investment banking revenue and asset management revenue because of uncertainty in the economic outlook and lower equity and fixed income market prices from a year ago. We don't anticipate making a material change to our $111 fair value estimate for no-moat-rated Raymond James and we assess shares are moderately undervalued.