Is Raymond James Financial Stock Underperforming the Dow?

Raymond James Financial, Inc. RJF, with a market cap of $25 billion, operates in the financial services sector. The Saint Petersburg, Florida-based company offers investment banking, wealth management, asset management, and banking services to individuals, corporations, and municipalities across the U.S., Canada, and Europe.

Companies valued at $10 billion or more are generally considered "large-cap" stocks, and Raymond James Financial fits this criterion perfectly. Raymond James Financial is renowned for its client-focused approach, offering comprehensive financial services through a decentralized model that emphasizes personalized investment and wealth management strategies.

Despite an 8% decline from its 52-week high of $131.19 reached in April, Raymond James Financial's shares have increased 2.3% over the past three months but lagged behind the 7.3% rise seen in the broader Dow Jones Industrials Average ($DOWI) during the same period.

Longer term, RJF is up 8.2% on a YTD basis, lagging behind DOWI's 10.4% gains. Moreover, shares of RJF have surged 12.1% over the past 52 weeks, compared to DOWI’s 20.2% return over the same time frame.

However, since late August, RJF has shifted to a bullish pattern, trading above both its 50-day and 200-day moving averages.

Raymond James Financial has underperformed due to its exposure to headwinds in the commercial real estate sector and lower dividend yield compared to key competitors. However, the stock surged 5.2% following its Q3 earnings release on Jul. 24 due to a 27.3% increase in adjusted net income to $508 million or $2.39 per share, fueled by record revenue, client assets, and bank loans. Additionally, strong growth in investment banking revenue and net new assets in its private client group, along with robust recruiting activity, bolstered investor confidence.

The stock's rival, Morgan Stanley MS, has slightly outperformed RJF with a 12.9% increase over the past 52 weeks, but MS has lagged behind RJF YTD with a 7.1% gain.

Despite the stock's weak price action, analysts are moderately optimistic about its prospects. The stock has a consensus “Moderate Buy” rating overall from the 13 analysts covering the stock, and the mean price target of $129.54 suggests a premium of just 7.3% to current levels.

On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.