Zacks Investment Research downgraded shares of Raymond James Financial Inc. (RJF) from NEUTRAL to UNDERPERFORM on June 24, 2013, with a target price of $39.00.
We are downgrading our long-term recommendation on Raymond James to Underperform based on its lower-than-expected fiscal second quarter (ended Mar 31) earnings. Elevated expenses were the primary dampener for the quarter, but the company witnessed improved top line. Growth in assets under management (AUM) and assets under administration were also among the positives. The company's capital strength, efforts to boost revenues by recruiting experienced advisors, and synergies from its acquisitions are expected to be accretive to its financials going forward. Nevertheless, low interest rates, regulatory issues, and a sluggish economic recovery are expected to keep profitability under pressure in the near term.
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