Raymond James Financial, Inc.

Based on the provided analysis, here is a comprehensive assessment of Raymond James Financial (RJF).

Analysis Summary

From a technical perspective, RJF has experienced significant weakness and volatility, underperforming the market despite its average beta. While the stock may be nearing an oversold condition, the technical picture remains bearish in the near term. Fundamentally, the company shows a mix of strengths and weaknesses. It maintains strong revenue, high gross margins, and a very conservative balance sheet with low debt. However, profitability is facing pressure from rising costs, and key operational efficiency metrics like ROE are modest. The valuation appears reasonable, with P/E ratios suggesting the stock is fairly priced, though the lack of peer comparison data makes it difficult to assess its relative attractiveness. The primary risk is its high volatility, as evidenced by a substantial maximum drawdown.

Buy Recommendation

While RJF's valuation is reasonable and its balance sheet is robust, the combination of recent technical weakness, pressure on net income, and modest operational efficiency presents significant near-term headwinds. The stock's high volatility also suggests potential for further price declines during broader market weakness. Therefore, for investors seeking stability and strong momentum, RJF does not currently present a compelling buy opportunity. A more cautious approach, waiting for signs of improved operational performance and technical stabilization, would be prudent.

*Note: This is not investment advice, for reference only.*

RockFlow Model Forecast: Three Scenarios for 2026

Based on the comprehensive analysis provided, here is a 12-month outlook for Raymond James Financial (RJF).

The outlook for RJF over the next 12 months is cautious, with key catalysts including a potential rebound from an oversold technical condition and the company's robust, low-debt balance sheet providing stability. However, significant risks persist, primarily from ongoing pressure on net income from rising costs and its history of high volatility, which could lead to further underperformance during market downturns. While no specific analyst target is provided, the stock's "fair" valuation suggests limited multiple expansion, and a prudent target range would likely be contingent on demonstrating improved operational efficiency and technical stabilization, making the near-term path challenging.

Wall Street Consensus

Most Wall Street analysts are optimistic about Raymond James Financial, Inc.'s 12-month outlook, with consensus target around $158.03, indicating expected upside potential.

Overall, RJF has investment potential but also faces challenges. Here are key factors to weigh before investing.

Overall Assessment: RJF has demonstrated weak performance with notable declines over recent periods, exhibiting greater volatility than the broader market.

Short-term Performance: The stock declined 7.88% over one month and 3.35% over three months, underperforming the market by 3.33% during the latter period. These declines occurred despite the stock's near-market beta of 0.996, suggesting company-specific factors drove the underperformance.

Current Position: RJF currently trades 32% above its 52-week low but remains 11% below its recent high after experiencing a maximum drawdown of 23.16% over the past year. The recent correction from the high suggests the stock may be approaching oversold territory from a technical perspective.

Revenue & Profitability RJFs Q1 2026 revenue improved modestly to $4.18 billion from $4.13 billion in Q4 2025, with gross margins remaining strong at approximately 89%. However, net income declined from $604 million to $563 million quarter-over-quarter, primarily due to increased operating expenses, resulting in a slight compression of the net profit margin from 14.6% to 13.5%. Profitability remains substantial but faces pressure from rising costs.

Financial Health The company maintains a conservative capital structure, with a low debt-to-equity ratio of 0.37 and a debt ratio of just 5.2%. However, operating cash flow to sales is modest at 3.4%, and the interest coverage ratio of 1.65 indicates limited cushion for servicing interest obligations from operating earnings. Strong cash per share of $83.87 provides liquidity support, though cash flow generation relative to debt is low.

Operational Efficiency RJF demonstrates moderate efficiency with an ROE of 4.5% and an asset turnover of 0.047, reflecting relatively low revenue generation from its asset base. The high cash conversion cycle of -1,145 days indicates the firm efficiently manages payables but may also suggest extended supplier credit terms. Fixed asset turnover of 3.32 is reasonable, though overall capital efficiency appears modest.

Valuation Level: RJF's current valuation appears reasonably priced based on its PE ratios. The TTM PE of 14.85 and forward PE of 14.06 suggest stable earnings expectations and indicate the stock is neither significantly overvalued nor undervalued on an absolute basis. While the negative PEG ratio raises some concern about earnings trajectory, the moderate PE levels provide a relatively balanced valuation picture.

Peer Comparison: Without specific industry average data, a comprehensive peer comparison cannot be conducted. However, RJF's valuation metrics would typically be assessed against capital markets or investment banking industry peers to determine relative attractiveness. The absence of benchmark data limits the ability to conclude whether RJF trades at a premium or discount to its sector.

Volatility Risk: With a beta of 0.996, RJF's price movements are projected to closely mirror the broader market, indicating average market risk exposure. The 1-year maximum drawdown of -23.16%, however, demonstrates that the stock has experienced significant peak-to-trough declines, suggesting investors should be prepared for periods of substantial price depreciation during market downturns.

Other Risks: The negligible short interest implies that professional investors currently perceive a low probability of a significant near-term price decline. While this is a positive sentiment indicator, the absence of data on liquidity or other fundamental factors makes a complete risk assessment incomplete.