Raymond James' (RJF) Q2 Results Stunk, But Shorts Shouldn't Get too Cozy - Analyst

April 25, 2013 12:06 PM EDT Send to a Friend
Get Alerts RJF Hot Sheet
Price: $57.13 +0.02%

Rating Summary:
    7 Buy, 4 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 15 | Down: 38 | New: 13
Trade RJF Now!
Join SI Premium – FREE
Shares of Raymond James (NYSE: RJF) are down over 6 percent Thursday following what even bullish analysts are describing as "lackluster" second quarter 2013 results.

FBR Capital analyst Steve Stelmach said while Raymond James has long been an FBR Top Pick, there's not much evidence of strength in the latest quarterly report from the investment house.

Raymond James reported Q2 EPS of $0.68, $0.11 worse than the analyst estimate of $0.79. Revenue for the quarter came in at $1.14 billion versus the consensus estimate of $1.14 billion.

Stelmach said while Wall Street may share a little blame for the "miss," the majority is on the company.

"To be fair, the lemming-like migratory patterns of the sell-side community (ourselves included) exacerbated the company's EPS miss by revising estimates higher in recent weeks when, in hindsight, industry evidence would suggest modest estimate tweaks lower were more apropos," the analyst said. "Nonetheless, the quarter was a "miss," a disappointment, uninspiring, ...lackluster."

Still, short sellers may find their moment in the sun short-lived, the analyst said.

"If you are short the stock, enjoy the moment. It will likely prove fleeting," the analyst said. "If you are long, take heart; we calculate 2Q13 adjusted ROTE of 13%, a disappointing return by RJF standards, but one that RJF's larger-cap brethren would likely drool over, even in good times. In a broader context, with the stock trading at 2x TBV and generating a 13% adjusted ROTE, RJF produced an annualized trailing return on fiscal 2Q13 of 6.4% for investors, nearly on par with the consensus expected FY13 return on the S&P 500 of 6.9%. Not bad for a "lackluster" quarter."

The firm maintained their Outperform rating and $51 price target.

For an analyst ratings summary and ratings history on Raymond James click here. For more ratings news on Raymond James click here.

Shares of Raymond James are down 6.7 percent.

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In

Related Categories

Analyst Comments, Analyst EPS View

Related Entities

Raymond James, Standard & Poor's

Add Your Comment