On Thursday, Goldman Sachs (NYSE:GS) maintained a Neutral rating on shares of Raymond James (NYSE:RJF) shares, with a steady stock price target of $127.00. The firm noted that Raymond James reported a 1.9% month-over-month increase in total client assets, which marks a 15% growth year-over-year. This uptick was attributed to improved equity markets and strong recruiting trends throughout the month.
Total client assets at Raymond James experienced a positive trajectory, with cash balances, including Enhanced Savings Program (ESP) balances, ending at $56.0 billion. This figure is approximately 1.5% higher than the management's projection during the last month's earnings call.
Previously, the company had indicated a month-to-date cash balance decline of $1.25 billion, which would have suggested July Sweep plus ESP balances of $55.2 billion. The slight month-over-month decrease in Client Cash Sweep plus ESP balances was linked to standard fee billing at the beginning of the quarter, which was somewhat counterbalanced by new net assets.
There was no additional breakdown for the Enhanced Savings Program in the July metrics, except for the mention that both Cash Sweep and ESP saw a slight decline from the previous month. Goldman Sachs estimated an annualized organic net new asset (NNA) growth rate of approximately 5.8% for Raymond James on total client assets, which aligns with the firm's long-term average. This estimate was consistent for both the firm-wide assets and Private Client Group (PCG) client assets.
The July performance also included a note regarding investment banking, with Raymond James highlighting an improvement in results for the month. This was indicative of a pace of deal closings and activity levels that surpassed initial expectations, as hinted during the earnings per share (EPS) discussion.
In summary, Goldman Sachs recognized the July trends for Raymond James as relatively surpassing expectations, while maintaining their Neutral stance on the stock with a consistent stock price target.
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