Solid Trading & IB Performance to Support RJF's Q4 Earnings

Core Viewpoint - Raymond James (RJF) is expected to report a decline in earnings for the fourth quarter of fiscal 2025, while revenues are anticipated to increase [1][3]. Financial Performance - Earnings for RJF are projected at $2.70, reflecting an 8.5% year-over-year decline, while revenues are estimated at $3.60 billion, indicating a 4% growth [3]. - The last reported quarter saw RJF's earnings miss the Zacks Consensus Estimate, primarily due to a $58 million reserve increase related to a legal settlement and higher expenses [2]. Revenue Drivers - Asset management and related administrative fees are expected to rise by 9% sequentially, driven by higher PCG assets and fee-based accounts [4]. - Investment Banking (IB) fees are estimated at $258 million, representing an 18.1% year-over-year decline, although advisory fees are expected to benefit from a rebound in global M&A activity [5][6]. - Trading revenues are likely to show solid growth due to strong client activity and market volatility driven by geopolitical and macroeconomic factors [7]. Interest Income and Expenses - Net Interest Income (NII) is projected at $991 million, indicating a 7.6% year-over-year decline, but is expected to be positively impacted by stable funding costs and a favorable lending environment [8][9]. - Total non-interest expenses are anticipated to increase by 5.4% year-over-year to $2.85 billion, driven by advisor hiring and inflationary pressures [10]. Earnings Surprise Potential - The company has a positive Earnings ESP of +2.00% and a Zacks Rank of 3, indicating a reasonable chance of beating the consensus estimate [11][12].