Why Raymond James Financial, Inc. Shares Might Keep Slumping

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a look at particularly stock-shaking analyst upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Raymond James Financial  (NYSE: RJF  ) traded sluggishly on Wednesday after Goldman Sachs downgraded the financial holding company from buy to neutral.

So what: Along with the downgrade, analyst Alexander Blostein lowered his price target to $54 (from $59), representing about 12% worth of upside to yesterday's close. So while contrarian traders might be attracted to Raymond James' sharp pullback in recent months, Blostein's call could reflect a sense that its growth headaches still aren't fully baked into the valuation.

Now what: According to Goldman, Raymond's risk/reward trade-off is pretty balanced at this point. "[G]iven the recent deceleration in retail activity and the choppier equity market backdrop, we expect near-term revenue growth to decelerate, pressuring estimates," said Blostein. "Moreover, with the Morgan Keegan acquisition now fully in the run-rate and lack of meaningful capital actions, we see fewer idiosyncratic catalysts to stay attractive." Given Raymond James' strong position in wealth management and still-juicy expansion prospects, however, those short-term concerns might be providing patient Fools with an attractive long-term opportunity.

Big banking's little $20.8 trillion secret
There's a brand-new company that's revolutionizing banking, and is poised to kill the hated traditional brick-and-mortar banks. That's bad for them, but great for investors. And amazingly, despite its rapid growth, this company is still flying under the radar of Wall Street. To learn about about this company, click here to access our new special free report.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2966974, ~/Articles/ArticleHandler.aspx, 10/24/2014 8:34:22 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement