Nyse Order Imbalance 607552.0 Shares On Sell Side

Financial stocks advanced in late Friday afternoon trading with the NYSE Financial Index and the Financial Select Sector SPDR Fund (XLF) each rising 0.9%.

The Philadelphia Housing Index climbed 1.4%, and the Real Estate Select Sector SPDR Fund (XLRE) rose 0.8%.

Bitcoin (BTC/USD) added 0.9% to $99,244, and the yield for 10-year US Treasuries shed 2 basis points to 4.41%.

In economic news, the November flash reading of manufacturing conditions from S&P Global increased to a four-month high of 48.8 from 48.5 in October, slightly lower than an expected reading of 48.9 in a survey compiled by Bloomberg.

The University of Michigan consumer sentiment index was revised downward to 71.8 for November from 73 in the preliminary estimate, compared with expectations for an upward revision to 73.9 in a survey compiled by Bloomberg.

In corporate news, Ally Financial is weighing a sale of its credit card business, Bloomberg reported. Its shares rose 1.8%.

Mercurity Fintech shares surged 21%. The company said Friday its Chaince Securities unit has obtained approval from the Financial Industry Regulatory Authority for the change in ownership of licensed broker-dealer J.V. Delaney & Associates.

Citigroup has been approved to establish regional headquarters in Riyadh, Saudi Arabia, Bloomberg reported. Its shares added 1.2%.

StoneCo shares jumped 11%, a day after the company's board authorized the repurchase of up to 2 billion Brazilian reais ($343.9 million) in class A shares.

A month has gone by since the last earnings report for Raymond James Financial, Inc. (RJF). Shares have added about 11.1% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Raymond James Financial due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Raymond James' Q4 Earnings Beat Estimates on Solid IB Business

Raymond James’ fourth-quarter fiscal 2024 adjusted earnings of $2.95 per share handily surpassed the Zacks Consensus Estimate of $2.44. The bottom line surged 38% from the prior-year quarter.

Results benefited from robust IB and brokerage performance in the Capital Markets segment. The performance of the PCG 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. Further, RJF recorded provisions for the quarter.

Net income available to common shareholders (GAAP basis) was $601 million or $2.86 per share, up from $432 million or $2.02 per share in the prior-year quarter.

For fiscal 2024, adjusted earnings of $10.05 beat the consensus estimate of $9.55 and grew 21% year over year. Net income available to common shareholders (GAAP basis) was $2.06 billion or $9.70 per share, up from $1.73 billion or $7.97 per share in fiscal 2023.

Revenues Improve, Expenses Rise

Quarterly net revenues were $3.46 billion, up 13% year over year. The top line outpaced the Zacks Consensus Estimate of $3.3 billion.

For fiscal 2024, net revenues grew 10% year over year to $12.82 billion, beating the consensus estimate of $12.67 billion.

Segment-wise, in the reported quarter, the Private Client Group recorded 9% growth in net revenues, Asset Management’s net revenues rose 17% and Capital Markets’ top line jumped 42%. Further, Others witnessed a 12% increase in revenues. On the other hand, Bank registered a fall of 4% from the prior year's net revenues.

Non-interest expenses rose 9% from the prior-year quarter to $2.7 billion. The increase was largely due to higher compensation, commissions and benefits costs and investment sub-advisory fees. Our estimate for non-interest expenses was $2.63 billion. Also, Raymond James recorded a bank loan provision for credit losses of $22 million, down 39%.

As of Sept.30, 2024, client assets under administration were $1.57 trillion, up 25% from the prior-year quarter. Financial assets under management of $244.8 billion grew 25%. Our estimates for client assets under administration and financial assets under management were $1.52 trillion and $229.2 billion, respectively.

Balance Sheet & Capital Ratios Strong

As of Sept. 30, 2024, Raymond James has total assets of $83 billion, up 3% from the prior quarter. Total equity rose 4% to $11.59 billion.

Book value per share was $57.03, up from $48.54 as of Sept. 30, 2023.

As of Sept. 30, 2024, the total capital ratio was 24.1% compared with 22.8% as of Sept. 30, 2023. The Tier 1 capital ratio was 22.8% compared with 21.4% as of September 2023-end.

Return on common equity (annualized basis) was 21.2% at the end of the reported quarter compared with 17.3% a year ago.

Update on Share Repurchases

In the reported quarter, Raymond James repurchased 2.6 million shares for $300 million.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month.

The consensus estimate has shifted 6.95% due to these changes.

VGM Scores

At this time, Raymond James Financial has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Raymond James Financial has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

Raymond James Financial belongs to the Zacks Financial - Investment Bank industry. Another stock from the same industry, Citigroup (C), has gained 9.4% over the past month. More than a month has passed since the company reported results for the quarter ended September 2024.

Citigroup reported revenues of $20.32 billion in the last reported quarter, representing a year-over-year change of +0.9%. EPS of $1.51 for the same period compares with $1.52 a year ago.

For the current quarter, Citigroup is expected to post earnings of $1.20 per share, indicating a change of +42.9% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.3% over the last 30 days.

Citigroup has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.

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