Shares of Raymond James RJF lost 2.3% in after-hours trading in response to lower-than-expected second-quarter fiscal 2025 results (ended March 31). Adjusted earnings of $2.42 per share lagged the Zacks Consensus Estimate of $2.44. The bottom line, however, grew 5% from the prior-year quarter.

Results were affected by higher non-interest expenses and subdued investment banking performance. CEO Paul Shoukry said, “The investment banking pipeline remains robust, although the timing of closings has been impacted by the macroeconomic uncertainty associated with tariff negotiations.”

On the other hand, decent brokerage performance in the Capital Markets segment and robust performance in the Private Client Group and Asset Management segments supported RJF’s results. The acquisitions over the past years aided the company’s financials.

Net income available to common shareholders (GAAP basis) was $493 million or $2.36 per share, up from $474 million or $2.22 per share in the prior-year quarter.

RJF’s Revenues Increase, Expenses Rise

Quarterly net revenues were $3.40 billion, up 9% year over year. The top line missed the Zacks Consensus Estimate of $3.43 billion.

Segment-wise, in the reported quarter, the Private Client Group recorded 6% growth in net revenues, Asset Management’s net revenues rose 15% and Capital Markets’ top line jumped 23%. Further, Bank registered a rise of 2% from the prior year's net revenues, while Others recorded a 9% fall in net revenues.

Non-interest expenses rose 9% from the prior-year quarter to $2.73 billion. The increase was largely due to a jump in compensation, commissions and benefits costs and investment sub-advisory fees. Our estimate for non-interest expenses was $2.75 billion. Further, RJF recorded bank loan provision for credit losses of $16 million in the reported quarter, down 24%.

As of March 31, 2025, client assets under administration were $1.54 trillion, up 6% from the prior-year quarter. Financial assets under management of $245 billion grew 8%. Our estimates for client assets under administration and financial assets under management were $1.6 trillion and $251.1 billion, respectively.

RJF’s Balance Sheet & Capital Ratios Strong

As of March 31, 2025, Raymond James had total assets of $83.13 billion, up 1% from the prior quarter. Total equity rose 2% to $12.13 billion.

Book value per share was $59.74, up from $52.60 as of March 31, 2024.

As of March 31, 2025, the total capital ratio was 24.8% compared with 23.3% as of March 31, 2024. The Tier 1 capital ratio was 23.5% compared with 21.9% as of March 2024-end.

Return on common equity (annualized basis) was 16.4% at the end of the reported quarter compared with 17.5% a year ago.

Story Continues

Update on Raymond James’ Share Repurchases

In the reported quarter, RJF repurchased shares for $250 million.

Our View on Raymond James

Raymond James’ global diversification efforts, strategic acquisitions and relatively high rates are expected to support top-line growth. However, elevated operating expenses, the current uncertain operating backdrop due to tariff-related headwinds and the volatile nature of capital markets business are major concerns.

Raymond James Financial, Inc. Price, Consensus and EPS SurpriseRaymond James Financial, Inc. Price, Consensus and EPS Surprise

Raymond James Financial, Inc. price-consensus-eps-surprise-chart | Raymond James Financial, Inc. Quote

Currently, Raymond James carries a Zacks Rank #4 (Sell). 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of RJF’s Peers

Morgan Stanley’s MS first-quarter 2025 earnings of $2.60 per share handily outpaced the Zacks Consensus Estimate of $2.23. The bottom line also rose 28.7% from the prior-year quarter.

Results benefited from a solid performance of IB and trading businesses, and a rise in net interest income. However, higher expenses and provisions were the undermining factors for MS. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Jefferies Financial Group’s JEF first-quarter fiscal 2025 (ended Feb. 28) adjusted earnings from continuing operations of 68 cents per share missed the Zacks Consensus Estimate of 88 cents. The bottom line also compared unfavorably with the prior-year quarter’s earnings of 78 cents.

Results were adversely impacted by weak performance in the investment banking (IB) business and lower capital markets revenues. The performance of the reportable segments also declined. However, a reduction in non-interest expenses was a positive for JEF.

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