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Raymond James (RJF) Q4 Earnings Beat, Revenues & Costs Rise

Zacks Equity Research
·4-min read

Raymond James’ RJF fourth-quarter fiscal 2021 (ended Sep 30) adjusted earnings of $2.06 per share easily outpaced the Zacks Consensus Estimate of $1.75. The bottom line was up 73% from the prior-year quarter.

Results benefited from an impressive performance of the Capital Markets and Asset Management segments, which majorly drove revenue growth. A rise in assets balance, lower provisions, and a strong balance sheet position were the other tailwinds. However, higher operating expenses posed an undermining factor.

Net income (GAAP basis) was $429 million or $2.02 per share, up from $209 million or $1.00 per share in the prior-year quarter.

In fiscal 2021, adjusted earnings per share of $7.05 beat the consensus estimate of $6.75 and also surged 73% year over year. Net income (GAAP basis) was $1.4 billion or $6.63 per share, up from $818 million or $3.88 per share in the prior year.

Revenues & Costs Increase

Quarterly net revenues were $2.70 billion, increasing 30% year over year. The rise was driven by improvement in all revenue components. The top line also beat the Zacks Consensus Estimate of $2.51 billion.

In fiscal 2021, net revenues grew 22% to $9.76 billion. It also surpassed the Zacks Consensus Estimate of $9.6 billion.

Segment-wise, in the reported quarter, RJ Bank registered a rise of 9% from the prior year in net revenues. Also, both Private Client Group and Asset Management recorded 29% growth in revenues. Capital Markets’ top line surged 35% from the year-ago quarter. Others recorded negative revenues of $2 million compared with negative revenues of $20 million in the prior-year quarter.

Non-interest expenses increased 17% to $2.14 billion. The rise was mainly due to higher compensation, commissions and benefits, and business development charges and investment sub-advisory fees, which were partly offset by lower bank loan provision and other costs.

As of Sep 30, 2021, client assets under administration were $1.18 trillion, up 27% from the end of the prior-year quarter. Financial assets under management were $191.9 billion, up 25%.

Strong Balance Sheet & Capital Ratios

As of Sep 30, 2021, Raymond James reported total assets of $61.9 billion, up 8% sequentially. Total equity increased 5% from the fiscal third quarter to $8.2 billion.

Book value per share was $40.08, up from $34.72 as of Sep 30, 2020.

As of Sep 30, 2021, total capital ratio was 26.2% compared with 25.4% as of Sep 30, 2020. Tier 1 capital ratio was 25% compared with 24.2% as of September 2020-end.

Return on equity (annualized basis) was 21.3% at the end of the reported quarter compared with 11.9% a year ago.

Our Take

Raymond James’ global diversification efforts, strategic acquisitions, and strength in the investment banking business are expected to keep supporting top-line growth. However, continuously mounting operating expenses and lower interest rates remain near-term concerns.

Raymond James Financial, Inc. Price, Consensus and EPS Surprise

Raymond James Financial, Inc. Price, Consensus and EPS Surprise
Raymond James Financial, Inc. Price, Consensus and EPS Surprise

Raymond James Financial, Inc. price-consensus-eps-surprise-chart | Raymond James Financial, Inc. Quote

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Currently, Raymond James carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance & Earnings Date of Other Brokerage Firms

Charles Schwab’s SCHW third-quarter 2021 adjusted earnings of 84 cents per share surpassed the Zacks Consensus Estimate of 80 cents. The bottom line jumped 65% from the prior-year quarter.

Interactive Brokers Group’s IBKR third-quarter 2021 adjusted earnings per share of 78 cents surpassed the Zacks Consensus Estimate of 75 cents. The bottom line reflects growth of 47.2% from the prior-year quarter.

BGC Partners, Inc. BGCP is slated to announce quarterly numbers on Nov 3.


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The Charles Schwab Corporation (SCHW) : Free Stock Analysis Report

Interactive Brokers Group, Inc. (IBKR) : Free Stock Analysis Report

BGC Partners, Inc. (BGCP) : Free Stock Analysis Report

Raymond James Financial, Inc. (RJF) : Free Stock Analysis Report

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Zacks Investment Research