RJF — brokerage cash flow at 14× earnings

Raymond James Financial (NYSE: RJF), the St. Petersburg, Florida-based broker-dealer, wealth-management, investment-banking, asset-management, and banking company, is today's featured pick because its quality and valuation screens are strong enough to deserve a closer look. The caveat is important: RJF is a clean pass on ROE and valuation, but its FCF screen is a technical pass rather than a textbook one because FY2023 free cash flow was negative from broker-dealer working-capital movement. As of the June 25, 2026 close, RJF traded at $150.52, with a $29.33B market cap, 17.05% TTM ROE, $2.38B TTM FCF, and a 14.22× trailing P/E. 1 2

ROE gate: pass. RJF's return on equity has stayed above 15% in each of the last three completed fiscal years: 17.73% in FY2023, 18.93% in FY2024, and 17.61% in FY2025; TTM ROE is 17.05%. RJF's fiscal year ends on September 30, so FY2025 refers to the year ended September 30, 2025, and TTM refers to the period ended March 31, 2026. 3

Free-cash-flow gate: technical pass. RJF reported free cash flow of -$3.69B in FY2023, $1.95B in FY2024, $2.25B in FY2025, and $2.38B TTM. The FY2023 miss came from a -$6.09B accounts-payable movement, while FY2023 net income was $1.74B; that makes the failure look like broker-dealer balance-sheet timing rather than an operating loss, but it is still not a clean three-year all-positive FCF record. 2 4

Valuation gate: pass. RJF trades at 14.22× trailing earnings, near its roughly 14.01× five-year P/E average and below the capital-markets peer median of about 18.65×. Its forward P/E is 12.00×, PEG is 0.88, P/B is 2.33×, and TTM FCF yield is about 8.13%. 1 3

The practical verdict: RJF belongs on the research list, but investors who require literal positive FCF in every one of the last three fiscal years should mark the pick as borderline.

Raymond James Financial is a diversified financial holding company. Its subsidiaries include Raymond James & Associates, Raymond James Financial Services, Eagle Asset Management, and Raymond James Bank, and the company provides brokerage, investment banking, asset management, corporate banking, retail banking, and trust services. 5

In plain language, RJF makes money from four linked activities. The wealth-management operation gathers client assets and advisor relationships. The capital-markets business advises on deals and raises capital. The asset-management arm earns fees on managed portfolios. The bank balance sheet earns spread income from lending and client cash. Morningstar's July 2024 report argued that wealth management is the center of the moat: that segment accounts for more than 75% of revenue and more than 70% of pretax profit, and client relationships create switching costs. 6

That mix explains why RJF looks different from a simple asset manager or investment bank. Wealth management makes the revenue base stickier, while capital markets adds cyclicality. The bank and broker-dealer balance sheet also make cash-flow and debt metrics noisier than they would be for a pure advisory firm.

RJF's ROE record is the cleanest part of the thesis:

The last three completed fiscal years all clear the channel's 15% threshold. The TTM figure is lower than FY2024, but it still sits above the hurdle and lines up with the company's recent Q2 FY2026 annualized ROE of 17.3%. 7

ROE alone does not make the stock cheap. It does, however, show that RJF has kept earning mid-to-high-teens returns through a period that included rate-cycle changes, market volatility, and uneven investment-banking conditions.

RJF's FCF story needs more care than a simple pass/fail label.

The current cash generation is real. TTM FCF of $2.38B against a $29.33B market cap produces an FCF yield of about 8.13%. 1 The weak point is continuity. FY2023 was negative because working-capital items moved sharply against reported cash flow, including the -$6.09B accounts-payable change. 2

For a broker-dealer, that distinction matters. Client payables, trading assets, segregated cash, and short-term financing can swing operating cash flow without saying much about the earnings power of the advisory and wealth-management franchise. Still, the cash-flow screen should not be overstated. RJF is a current-FCF and normalized-FCF candidate, not a clean three-year FCF compounder.

RJF's trailing P/E is 14.22×, compared with annual P/E readings of 13.92× in FY2021, 14.16× in FY2022, 12.60× in FY2023, 12.62× in FY2024, and 16.76× in FY2025. The five-year average is roughly 14.01×, so the stock is close to its own historical norm rather than at a deep discount. 3

The peer comparison is more favorable. StockAnalysis showed these peer valuation points around the same data pull: Charles Schwab (SCHW) at 17.79× trailing P/E and 3.66× P/B; Goldman Sachs (GS) at 19.50× and 2.99×; Morgan Stanley (MS) at 20.03× and 3.34×; Jefferies (JEF) at 14.72× and 1.01×; Evercore (EVR) at 19.57× and 7.54×; and Stifel (SF) at 13.91× and 2.07×. 8 9 10 11 12 13

Against that group, RJF's 14.22× P/E is below the approximate 18.65× peer median, and its 2.33× P/B is below the approximate 3.17× peer median. 1 That discount is not enough to call RJF a distressed bargain, but it is enough to satisfy a reasonable-valuation screen for a business still earning about 17% on equity.

RJF revenue grew from $9.76B in FY2021 to $14.07B in FY2025, a cumulative increase of 44.1%. Net income rose from $1.40B to $2.14B over the same period, and TTM revenue reached $14.72B with $2.15B in TTM net income. 4

Margins have been stable rather than spectacular. StockAnalysis data show operating margin in a 18.38%-20.61% range across the recent period, with TTM operating margin at 18.79% and TTM net margin at 14.59%. 4 Q2 FY2026 added a near-term check: the quarter produced record revenue of $3.86B, up 13% year over year, EPS of $2.72, adjusted EPS of $2.83, and client assets of $1.7T, up 15% year over year. 7

The balance sheet is where RJF requires financial-sector context. StockAnalysis balance-sheet data show $91.94B in total assets, $12.61B in equity, and $66.64B in total debt at the TTM date; that total debt includes $63.12B of short-term broker-dealer financing and $3.52B of long-term debt. 14 The statistics page shows a D/E ratio of 0.48, while the broader balance-sheet debt/equity calculation is 5.29× because it includes broker-dealer financing. 1 14

That split is the reason a single debt ratio can mislead. Long-term corporate debt looks manageable against cash and earnings. Broker-dealer financing makes the balance sheet large because the business handles client and trading flows.

Capital return is a real part of the setup. RJF pays $2.16 per share annually, for a dividend yield of about 1.44%, and the payout ratio is 19.43%. 15 The board approved a $2B share-repurchase authorization on December 3, 2025, and Q2 FY2026 included $400M of buybacks at an average price of $155. 16 7

Morningstar raised RJF's economic-moat rating from None to Narrow in July 2024. Its argument centered on switching costs in wealth management: clients and advisors do not move complex financial relationships casually, and RJF's wealth-management arm has grown client assets at about a 12% CAGR and advisor count at about a 4% CAGR since 2010. 6

The advisor base matters because RJF is partly a distribution platform. Morningstar cited 8,712 affiliated advisors in FY2023, with roughly 40% employee advisors and 60% independent contractors. 6 That mixed model gives RJF more than one route to gather assets, but it also creates constant competition for advisor recruiting and retention.

The Q2 FY2026 call showed that recruiting remains active. RJF reported recruited advisors with $141M in trailing-12-month production and nearly $21B in client assets, described as the company's second-highest recruiting quarter. 7

1. The FCF gate is not clean. The channel's preferred screen asks for positive free cash flow, and RJF's FY2023 FCF was -$3.69B. The broker-dealer explanation is credible, but investors who want mechanical three-year FCF consistency should not ignore the exception. 2

2. Short interest is elevated for a quality-financial pick. Finviz showed 6.36% of the float sold short, equal to 11.08M shares and 7.74 days to cover. 15 That does not prove the short thesis is right, but it raises the bar for monitoring the next earnings print.

3. Insider selling has been visible. Former CEO and current Executive Chair Paul Reilly sold 130,687 shares on December 15, 2025, for about $21.3M at an average price of $163.15. Chief Administrative Officer Bella Loykhter Allaire sold 29,551 shares on March 19, 2026, for about $4.2M at $142.34, and EVP/general counsel Jonathan Santelli sold 4,500 shares on February 4, 2026, for about $767K at $170.46. 15 Routine option-related selling is common, but the absence of a visible offsetting buy signal means the pattern should stay on the checklist.

4. Capital-markets talent can leave. Reuters reported on June 16, 2026 that Brendan Ryan and Jon Steele, RJF's global co-heads of technology and services investment banking, planned to join Berenson & Co. in August 2026 and acquire a 50% stake in that merchant bank. 17 The wealth-management engine is larger than investment banking, but losing senior tech bankers can hurt a cyclical business just as deal activity recovers.

5. Rate cuts can pressure client-cash economics. RJF's FY2025 10-K flagged interest-rate risk, including the risk that lower short-term rates hurt net interest income and Raymond James Bank Deposit Program fees; Q2 FY2026 commentary also showed PCG pretax profit down 3% year over year because of rate pressure. 7 18

6. Securities-based lending has grown. RJF's bank loan portfolio reached $54.8B, and securities-based loans grew 31% year over year in Q2 FY2026. 7 That growth helps earnings in good markets, but it increases sensitivity to collateral values if markets sell off sharply.

Q3 FY2026 earnings are the next checkpoint. The research package identifies the next earnings date as July 22, 2026 after market close. The key items are PCG pretax margin, client cash revenue, advisor recruiting, loan growth, capital-markets backlog, and whether buybacks continue near the recent $155 average repurchase price. 7

The analyst setup is moderately constructive, not euphoric. Finviz showed a 2.38 consensus rating, between Buy and Hold, with an average price target of $173.25; from the $150.52 June 25 close, that implies about 15.1% upside. 15 ChartMill separately showed 18 analysts covering RJF, with 71% rated Buy. 19

The stock is closer to its low than its high. RJF's 52-week range is $138.82-$177.66, so the June 25 close of $150.52 was about 8.4% above the low and 15.3% below the high. 15 That price position helps the setup, but it is not a catalyst by itself. The catalyst is confirmation that earnings and cash generation still support the 14× multiple.

RJF is a reasonable daily pick for investors who want a profitable, shareholder-returning financial company rather than a momentum trade. The ROE record clears the screen, the valuation is cheaper than most capital-markets peers, and the wealth-management franchise has real switching-cost support.

The decision point is the FCF exception. If an investor treats FY2023 as a broker-dealer working-capital artifact, RJF looks like a mid-teens-ROE business at a fair-to-attractive price. If an investor requires three clean years of positive FCF, RJF should stay on the watchlist until the company adds another clean cash-flow year.