RAYMOND JAMES FINANCIAL INC (RJF): what the price requires

At today's price, RAYMOND JAMES FINANCIAL INC (RJF) is priced for +2.7% earnings growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.

Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/RJF

Headline

FieldValue
TickerRJF
CompanyRAYMOND JAMES FINANCIAL INC
Current price$167.00/sh
CompositionPrivate Client Group 68% / Capital Markets 12% / Asset Management 8% / Bank 12%

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basisfee-financial
Implied earnings growth2.7%
Price-to-earnings15.3x
Earnings yield6.5%

A hybrid: a fee franchise alongside a sizeable balance sheet, valued here on the fee annuity.

Solve inputs: computed at a 10.4% cost of equity with 4% terminal growth over a 5-year stage, on the latest fiscal year's GAAP earnings base; each 1pp of cost of equity moves the implied earnings growth ~3.6pp.

Reconcile: at the x-ray's 9.3% required return this reads ~-1.8%/yr; the models below use their own rates.

How unusual the bet is: within-range (limited comparison data)

ReferenceValue
vs own history-0.97σ
cohort percentile (of 49 peers)18

Valuation X-Ray

The price is supported by asset-based value. A value/asset-supported name, not a pure growth bet.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset1.22x4expensive
Earnings1.47x2expensive
Relative1.27x4expensive
Growth1.38x1expensive

Families that justify the price: Asset

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 6.1%); the inversion above states its own rate.

Per-Model Detail (n=11)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth——no—
DCF Exit MultipleGrowth$0.00—noNegative/zero FCF or EBITDA — equity value floored at $0
Relative ValuationRelative$136.201.23xyesP/E 12x (static sector reference · 2026-04), scenarios: 10.0x / 12.0x / 14.0x (bear / base = reference held flat / bull), EV/EBITDA N/Ax
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$116.521.43xyesBV/sh $63.09, ROE (TTM) 17.1%, ke 9.3%
Two-Stage Excess ReturnAsset$156.301.07xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$120.961.38xyesRev $16.5B, growth 5% (input: historical growth; tapered), Terminal P/S: 1.7x / 2.0x / 2.4x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair ValueRelative$127.081.31xyesEPS $10.59, growth 2% (input: historical EPS growth), PEG=7.34 (Overvalued)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings——no—
Residual IncomeAsset$157.061.06xyesBV $63.09 + 5yr PV of (ROE (TTM) 17.1% − Kₑ 9.3%) × BV; BV grows 8.8%/yr
Graham NumberAsset$122.611.36xyes√(22.5 × EPS $10.59 × BVPS $63.09) — Graham's conservative floor
EV/EBITDA RelativeRelative——no—
FCF YieldEarnings$0.0116700.00xyesFCF $2384.0M / Kₑ 9.3% — zero-growth perpetuity (excluded from median)
SBC-Adj FCF YieldEarnings$0.0116700.00xyesSBC-adj FCF $2.14B (FCF $2.38B − SBC $0.24B) capitalized at Kₑ (excluded from median)
Ben Graham FormulaEarnings$112.901.48xyesEPS $10.59 × (8.5 + 2×2.1%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset——no—
P/Sales SectorRelative$248.040.67xyesRevenue $16.47B × sector P/S 3.0x
PEG Fair ValueRelative$52.953.15xyesEPS $10.59 × (PEG 1.5 × growth 2.1% (input: historical EPS growth)) → PE 3.2x
Earnings YieldEarnings$114.491.46xyesEPS $10.59 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Share count CAGR (buyback)-1.7%

Custody and consolidated-fund balance sheet: deposits, client cash, and fund-level debt are not corporate leverage, and operating cash flow follows client flows. Net-debt, coverage, and cash-burn lenses are suppressed as misleading; share-count CAGR is kept. The fee-earnings read above is the valuation basis.

Bullet Takeaways

Bull Case

The counterintuitive thing about Raymond James is that a business earning a 17 percent return on equity, growing client assets in the mid-teens, and just printing a record quarter trades at roughly 14 times earnings, a multiple the market reserves for businesses with far less visibility. The earnings power is high-quality and recurring. The Private Client Group holds, per the 10-K, "Total client assets under administration ("AUA") in our PCG segment as of September 30, 2025 were $1.67 trillion, of which $1.01 trillion related to fee-based accounts," and fee-based assets generate revenue as a percentage of asset value rather than per trade. That is an annuity-like stream that compounds with markets and with net new advisor assets, not a cyclical trading book.

The growth is in the flows, and the flows are strong. Client assets under administration reached $1.7 trillion, up 15 percent year over year, with $23 billion of net new assets in the fiscal second quarter, a 5.8 percent annualized organic growth rate that does not depend on market direction. Raymond James has long competed for advisors by offering a supportive home rather than the highest signing bonus, and the recurring fee base is what those advisors bring with them. The bank and capital-markets arms add cyclical upside on top of the wealth annuity: the most recent quarter set a record at $3.86 billion of net revenue, up 13 percent year over year, with pretax income of $735 million.

Capital strength turns the franchise into a compounding machine. The firm reported a Tier 1 leverage ratio of 12.4 percent and roughly $2.1 billion of excess capital capacity, and it is already deploying it, repurchasing $400 million of stock at about $155 a share during the quarter while the share count shrinks about 1.7 percent a year. A wealth manager with a recurring fee base, organic asset growth in the high single digits, a fortress capital position, and a buyback retiring shares below where the business is growing is the kind of holding where time does the work. At 14 times earnings, the market is asking it to grow barely above inflation; the franchise is doing considerably more than that.

Bear Case

The structural truth a Raymond James holder would rather not face is that this is a market-levered business wearing the steady clothing of a fee annuity. Most of the fee base is calculated as a percentage of client asset values, so the same $1.67 trillion of client assets that compounds in a bull market contracts in a bear one, and the record $3.86 billion revenue quarter was helped by elevated asset levels and interest rates that will not stay elevated forever. The price embeds fee-earnings growth of only about 1.3 percent a year, which looks like a low bar, but it is a low bar precisely because the next leg of growth depends on markets the firm does not control and on a rate environment that has flattered net interest income from client cash.

The cost structure is the second pressure, and it is built into the business model. Growth in wealth management is bought with advisor recruiting and retention, and the 10-K is explicit about the dependence, warning of the risk if the firm "were to lose the services of any of our financial advisors, investment bankers, senior equity research analysts, sales and trading professionals" to a competitor. The compensation ratio is the single largest expense line, and the same competition that drives net new assets drives up the cost of keeping the advisors who hold them. The most recent quarter already flagged cost pressure alongside the revenue beat; a softer market would shrink revenue faster than these largely fixed advisor costs can adjust.

The valuation methods read this honestly as a value-supported name, not a growth one. The asset-based and relative-multiple methods land around the price, but the forward-growth method reads it as expensive, the mirror image of a stock whose value rests on demonstrated returns rather than on expansion the market is willing to pay up for. Peers frame the competitive set: Ameriprise and Morgan Stanley pursue the same fee-based wealth assets, with Morgan Stanley's disclosures describing revenues "based on the net asset value of the account in which a client is invested," the identical economics at far larger scale. Against deeper-pocketed competitors for the same advisors and the same client cash, a 14-times multiple on a market-sensitive fee base is less a bargain than a fair price for a good business with limited room to surprise to the upside.

Valuation

A capital-light fee business is worth the fee earnings it throws off rather than its book value, so Raymond James is read off price-to-earnings. At about 14 times earnings, a roughly 7 percent earnings yield, the price implies fee earnings grow only about 1.3 percent a year. For a franchise earning a 17 percent return on equity and growing client assets in the mid-teens, that is a conservative assumption, and it places the stock in the lower half of the fee-financial peer group's multiple.

The methods describe a value-supported name. The asset-based methods, built on book value of about $63 a share and a 17 percent return on equity, land at or above the price, the relative-multiple methods cluster near it, and only the forward-growth method reads the price as expensive. The pattern is the signature of a business priced on its demonstrated earnings power, not on growth the market is extrapolating. Because this is a hybrid, a fee franchise sitting alongside a sizeable bank balance sheet, the right lens is the fee annuity, which is where the franchise value lives; valuing it on the balance sheet alone would understate the recurring wealth-management economics.

The balance-sheet items here are client custody and bank funding, not corporate leverage, so the conventional debt and coverage lenses do not apply; the meaningful solvency read is capital strength and return capacity. On that basis the firm is conservatively positioned, with a Tier 1 leverage ratio of 12.4 percent and roughly $2.1 billion of excess capital, and it is returning capital through a buyback that retires about 1.7 percent of shares a year. The price is underwriting steady fee-asset growth and continued capital return; the franchise quality is in the price, and the open question is simply how much market and rate tailwind the recent record results were borrowing from.

Catalysts

The fiscal second quarter was a record, and the composition matters more than the headline. Net revenue reached $3.86 billion, up 13 percent year over year and 3 percent sequentially, with pretax income of $735 million and adjusted earnings of $2.83 per diluted share. Client assets under administration climbed to $1.7 trillion, up 15 percent year over year, with net new assets of $23 billion, a 5.8 percent annualized organic growth rate.

Capital deployment and cost are the two threads to watch. The firm repurchased $400 million of common stock at an average price of about $155 and redeemed $81 million of preferred, while holding a Tier 1 leverage ratio of 12.4 percent and roughly $2.1 billion of excess capital to deploy. The effective tax rate was 26 percent for the quarter, affected by nondeductible losses on corporate-owned life insurance, with management guiding to a 24 to 25 percent rate for fiscal 2026. The swing factors from here are the pace of net new assets, the compensation ratio as advisor competition continues, and how net interest income on client cash holds as rates move.

Peer Cohorts (Per Segment, With Filing Citations)

Private Client Group (reported)

Capital Markets (reported)

Asset Management (reported)

Bank (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

Sources

RJF fiscal Q2 2026 results · RJF fiscal Q2 2026 earnings call

View the full interactive RJF report on boothcheck