Increasing Our Moat Rating for Raymond James to Narrow and Lowering Our Uncertainty Rating

Raymond James’s results in recent years outperformed many of its peers, as it has a relatively large and steady wealth management business, made multiple acquisitions in recent years, and booked higher net interest income as the US federal funds rate rose. While we continue to expect fairly steady growth in the company’s revenue powered by its wealth management business, its revenue and earnings growth could underperform peers over the next several years. If we assume a soft landing to the US economy, investment banks will experience a large bounce back in profits from depressed 2023 levels. Raymond James has less exposure to a rebound in investment banking activity with its capital markets business historically being less than 20% of revenue.