Why Is Raymond James Financial (RJF) Down 11.1% Since Last Earnings Report?

Core Viewpoint - Raymond James Financial, Inc. reported strong first-quarter fiscal 2025 earnings, surpassing estimates, but shares have underperformed the S&P 500 in the past month, raising questions about future performance [1][2]. Financial Performance - Adjusted earnings for Q1 fiscal 2025 were $2.93 per share, exceeding the Zacks Consensus Estimate of $2.75, and reflecting a 22% increase from the prior-year quarter [2][3]. - Net income available to common shareholders was $599 million, or $2.86 per share, up from $497 million, or $2.32 per share, in the prior-year quarter [3]. - Quarterly net revenues reached $3.54 billion, a 17% year-over-year increase, surpassing the Zacks Consensus Estimate of $3.48 billion [4]. Segment Performance - The Capital Markets segment saw a 42% increase in revenues, while the Private Client Group and Asset Management segments reported growths of 14% and 25%, respectively [4]. - The Bank segment experienced a 4% decline in revenues, and the "Others" category saw a significant 54% drop [4]. Expense Analysis - Non-interest expenses rose 17% year-over-year to $2.79 billion, primarily due to increased compensation, commissions, and investment sub-advisory fees [5]. - No bank loan provision for credit losses was recorded in the reported quarter, contrasting with $12 million in the prior-year quarter [5]. Asset Management - As of December 31, 2024, client assets under administration totaled $1.56 trillion, a 14% increase from the prior-year quarter, while financial assets under management grew 13% to $243.9 billion [6]. Balance Sheet Strength - Total assets were $82.28 billion, down 1% from the prior quarter, while total equity increased by 2% to $11.84 billion [7]. - Book value per share rose to $57.89 from $51.32 a year ago, and the total capital ratio improved to 25% from 23% [7]. Return on Equity - The annualized return on common equity was 20.4%, up from 19.1% a year ago [8]. Share Repurchase Activity - In the reported quarter, the company repurchased 0.3 million shares for $50 million [9]. Future Outlook - For fiscal 2025, management anticipates non-compensation expenses to be approximately $2.1 billion, reflecting about 10% growth from the previous year [11]. - Management expects a sequential decline of 2-3% in aggregate net interest income and related fees due to two fewer billing days in the second quarter [12]. - The effective tax rate for fiscal 2025 is estimated to be around 24% to 25% [12]. Estimate Trends - There has been an upward trend in estimates revisions over the past month, indicating positive sentiment among investors [13][15]. VGM Scores - Raymond James Financial holds an average Growth Score of C, a Momentum Score of F, and a Value Score of B, resulting in an aggregate VGM Score of C [14].