ST. LOUIS - Stifel Financial Corp . (NYSE: NYSE:SF), a financial services holding company, disclosed on Thursday that its client assets under administration and fee-based client assets have reached new highs. As of July 31, 2024, client assets under administration climbed to $481 billion, marking a 2% increase from the previous month and a 13% rise year-over-year. Fee-based client assets grew to $183 billion, also up 2% from June 2024 and 16% from the same period last year.
The company attributed these increases to market appreciation and effective recruiting strategies. The Private Client Group's fee-based client assets saw a similar uptick, reaching $160.5 billion, which is a 2% increase since June 2024 and a 16% increase compared to July 31, 2023.
In addition to asset growth, Stifel reported a 2% month-over-month increase in bank loans, which was spurred by heightened activity in Fund Banking, Commercial & Industrial (C&I), and Residential Mortgage sectors. The net bank loans stood at $20.27 billion as of July 31, 2024, despite a slight decrease of 2% from the previous year.
The company also noted a modest growth in client money market and insured products, with an increase of approximately $100 million in July. This area, which encompasses Sweep deposits and Smart Rate deposits among others, showed a 5% growth year-over-year and remained stable compared to the previous month.
Stifel's Chairman and CEO, Ronald J. Kruszewski, emphasized that the positive figures in client asset growth and bank loans are indicative of the company's solid performance and market conditions in July. However, he cautioned that these limited data points should not be directly correlated with earnings expectations.
Stifel operates its banking and financial services through various subsidiaries, providing services to individual investors, businesses, and municipalities. The company's banking solutions are offered via Stifel Bank and Stifel Bank & Trust, while trust services are provided through Stifel Trust Company, N.A., and Stifel Trust Company Delaware, N.A.
The information disclosed is based on a press release statement from Stifel Financial Corp. and represents a snapshot of the company's performance for the month ending July 31, 2024.
In other recent news, Stifel Financial has been making notable strides in its financial performance. The company reported a significant increase in its Q2 net revenue, which reached $1.22 billion, marking a 16% rise from the prior year. This robust growth was largely driven by the Global Wealth Management and Institutional Group segments, which experienced substantial revenue growth. Despite a decline in net interest income, Stifel anticipates solid capital raising and advisory activity results in the future.
In terms of analyst attention, TD Cowen revised its outlook on Stifel Financial, raising the price target to $88.00 from the previous $85.00 and maintaining a Hold rating on the company's stock. This adjustment follows the review of the second-quarter 2024 results and the firm's resilience to cash sweep repricing risk. TD Cowen also revised its 2025 earnings estimate back to $8.00, considering a reduction in long-term net new assets and brokerage business, and a slight increase in projected costs.
However, Stifel Financial's stock was downgraded from Outperform to Peer Perform by Wolfe Research due to concerns over the company's cash sweep outlook. These are the recent developments that have shaped Stifel Financial's financial landscape.
InvestingPro Insights
As Stifel Financial Corp. (NYSE: SF) showcases robust growth in client assets and bank loans, InvestingPro data and tips offer deeper insights into the company's financial health and stock performance. With a market capitalization of $8.71 billion, Stifel's financial stability is reflected in its consistent ability to raise dividends for the past seven years. This is a testament to the company's commitment to returning value to shareholders, which aligns with the positive trends in client asset management reported in the article.
InvestingPro data indicates a Price/Earnings (P/E) ratio of 17.1, which is adjusted to 15.29 for the last twelve months as of Q2 2024. This suggests that Stifel's earnings could potentially support the current stock price. Moreover, the company's revenue growth of 5.88% over the same period signifies steady business expansion, which is further substantiated by the 16% increase in fee-based client assets.
One of the InvestingPro Tips highlights that six analysts have revised their earnings downwards for the upcoming period, which may require investors to keep a close watch on the company's future earnings reports. Nevertheless, another tip reveals that analysts predict the company will be profitable this year, reinforcing the positive outlook presented in the article.
For those seeking more comprehensive advice, there are additional InvestingPro Tips available for Stifel Financial Corp. at https://www.investing.com/pro/SF, offering valuable guidance for a well-rounded investment decision.
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