Intrinsic value of Raymond James Financial - RJF

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$73.68

  Intrinsic Value

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  Rating & Target

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  Value-price divergence*

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Previous close

$73.68

 
Intrinsic value

$557.70

 
Up/down potential

+657%

 
Rating

str. buy

 
Value-price divergence* premium content

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Our model is not good at valuating stocks of financial companies, such as RJF.

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of RJF stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 10.5

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  3.99
  19.30
  17.87
  16.58
  15.42
  14.38
  13.44
  12.60
  11.84
  11.16
  10.54
  9.99
  9.49
  9.04
  8.63
  8.27
  7.94
  7.65
  7.38
  7.15
  6.93
  6.74
  6.56
  6.41
  6.27
  6.14
  6.03
  5.92
  5.83
  5.75
  5.67
Revenue, $m
  5,520
  6,585
  7,762
  9,049
  10,445
  11,947
  13,554
  15,261
  17,068
  18,972
  20,972
  23,066
  25,255
  27,537
  29,915
  32,390
  34,963
  37,637
  40,417
  43,305
  46,307
  49,427
  52,672
  56,048
  59,560
  63,218
  67,028
  70,998
  75,139
  79,458
  83,966
Variable operating expenses, $m
 
  5,616
  6,612
  7,702
  8,884
  10,156
  11,515
  12,961
  14,491
  16,103
  17,796
  19,528
  21,381
  23,313
  25,327
  27,421
  29,600
  31,864
  34,217
  36,663
  39,204
  41,846
  44,593
  47,450
  50,424
  53,521
  56,746
  60,108
  63,613
  67,270
  71,086
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  4,743
  5,616
  6,612
  7,702
  8,884
  10,156
  11,515
  12,961
  14,491
  16,103
  17,796
  19,528
  21,381
  23,313
  25,327
  27,421
  29,600
  31,864
  34,217
  36,663
  39,204
  41,846
  44,593
  47,450
  50,424
  53,521
  56,746
  60,108
  63,613
  67,270
  71,086
Operating income, $m
  777
  969
  1,150
  1,347
  1,561
  1,792
  2,038
  2,300
  2,577
  2,869
  3,176
  3,538
  3,874
  4,224
  4,589
  4,968
  5,363
  5,773
  6,200
  6,643
  7,103
  7,582
  8,079
  8,597
  9,136
  9,697
  10,281
  10,891
  11,526
  12,188
  12,880
EBITDA, $m
  849
  1,042
  1,228
  1,432
  1,652
  1,890
  2,144
  2,414
  2,700
  3,001
  3,318
  3,649
  3,995
  4,356
  4,733
  5,124
  5,531
  5,954
  6,394
  6,851
  7,326
  7,819
  8,333
  8,867
  9,423
  10,001
  10,604
  11,232
  11,887
  12,570
  13,284
Interest expense (income), $m
  114
  112
  362
  637
  939
  1,265
  1,617
  1,993
  2,393
  2,816
  3,262
  3,730
  4,220
  4,733
  5,267
  5,824
  6,403
  7,006
  7,632
  8,283
  8,959
  9,662
  10,393
  11,152
  11,943
  12,765
  13,622
  14,514
  15,443
  16,413
  17,424
Earnings before tax, $m
  777
  857
  788
  710
  623
  527
  421
  307
  184
  53
  -86
  -192
  -347
  -509
  -679
  -856
  -1,040
  -1,233
  -1,433
  -1,640
  -1,856
  -2,080
  -2,313
  -2,555
  -2,807
  -3,068
  -3,340
  -3,623
  -3,918
  -4,225
  -4,544
Tax expense, $m
  271
  231
  213
  192
  168
  142
  114
  83
  50
  14
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  529
  626
  575
  518
  455
  384
  307
  224
  135
  39
  -86
  -192
  -347
  -509
  -679
  -856
  -1,040
  -1,233
  -1,433
  -1,640
  -1,856
  -2,080
  -2,313
  -2,555
  -2,807
  -3,068
  -3,340
  -3,623
  -3,918
  -4,225
  -4,544

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,650
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  31,487
  35,597
  41,958
  48,915
  56,461
  64,581
  73,263
  82,494
  92,261
  102,553
  113,362
  124,683
  136,512
  148,851
  161,704
  175,080
  188,988
  203,446
  218,470
  234,082
  250,308
  267,175
  284,715
  302,960
  321,947
  341,717
  362,311
  383,774
  406,154
  429,501
  453,869
Adjusted assets (=assets-cash), $m
  29,837
  35,597
  41,958
  48,915
  56,461
  64,581
  73,263
  82,494
  92,261
  102,553
  113,362
  124,683
  136,512
  148,851
  161,704
  175,080
  188,988
  203,446
  218,470
  234,082
  250,308
  267,175
  284,715
  302,960
  321,947
  341,717
  362,311
  383,774
  406,154
  429,501
  453,869
Revenue / Adjusted assets
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
  0.185
Average production assets, $m
  211
  250
  295
  344
  397
  454
  515
  580
  649
  721
  797
  877
  960
  1,046
  1,137
  1,231
  1,329
  1,430
  1,536
  1,646
  1,760
  1,878
  2,002
  2,130
  2,263
  2,402
  2,547
  2,698
  2,855
  3,019
  3,191
Working capital, $m
  0
  -1,739
  -2,049
  -2,389
  -2,758
  -3,154
  -3,578
  -4,029
  -4,506
  -5,009
  -5,537
  -6,090
  -6,667
  -7,270
  -7,898
  -8,551
  -9,230
  -9,936
  -10,670
  -11,433
  -12,225
  -13,049
  -13,905
  -14,797
  -15,724
  -16,689
  -17,695
  -18,744
  -19,837
  -20,977
  -22,167
Total debt, $m
  2,482
  7,379
  13,003
  19,153
  25,823
  33,001
  40,677
  48,837
  57,471
  66,569
  76,124
  86,132
  96,589
  107,497
  118,859
  130,682
  142,978
  155,758
  169,039
  182,841
  197,184
  212,095
  227,600
  243,728
  260,514
  277,990
  296,195
  315,168
  334,952
  355,591
  377,133
Total liabilities, $m
  26,570
  31,467
  37,091
  43,241
  49,911
  57,089
  64,765
  72,925
  81,559
  90,657
  100,212
  110,220
  120,677
  131,585
  142,947
  154,770
  167,066
  179,846
  193,127
  206,929
  221,272
  236,183
  251,688
  267,816
  284,602
  302,078
  320,283
  339,256
  359,040
  379,679
  401,221
Total equity, $m
  4,917
  4,129
  4,867
  5,674
  6,549
  7,491
  8,499
  9,569
  10,702
  11,896
  13,150
  14,463
  15,835
  17,267
  18,758
  20,309
  21,923
  23,600
  25,342
  27,154
  29,036
  30,992
  33,027
  35,143
  37,346
  39,639
  42,028
  44,518
  47,114
  49,822
  52,649
Total liabilities and equity, $m
  31,487
  35,596
  41,958
  48,915
  56,460
  64,580
  73,264
  82,494
  92,261
  102,553
  113,362
  124,683
  136,512
  148,852
  161,705
  175,079
  188,989
  203,446
  218,469
  234,083
  250,308
  267,175
  284,715
  302,959
  321,948
  341,717
  362,311
  383,774
  406,154
  429,501
  453,870
Debt-to-equity ratio
  0.505
  1.790
  2.670
  3.380
  3.940
  4.410
  4.790
  5.100
  5.370
  5.600
  5.790
  5.960
  6.100
  6.230
  6.340
  6.430
  6.520
  6.600
  6.670
  6.730
  6.790
  6.840
  6.890
  6.940
  6.980
  7.010
  7.050
  7.080
  7.110
  7.140
  7.160
Adjusted equity ratio
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  529
  626
  575
  518
  455
  384
  307
  224
  135
  39
  -86
  -192
  -347
  -509
  -679
  -856
  -1,040
  -1,233
  -1,433
  -1,640
  -1,856
  -2,080
  -2,313
  -2,555
  -2,807
  -3,068
  -3,340
  -3,623
  -3,918
  -4,225
  -4,544
Depreciation, amort., depletion, $m
  72
  72
  78
  84
  91
  98
  106
  114
  123
  132
  142
  111
  121
  132
  144
  156
  168
  181
  194
  208
  223
  238
  253
  270
  286
  304
  322
  342
  361
  382
  404
Funds from operations, $m
  -1,306
  698
  654
  603
  546
  483
  413
  338
  257
  171
  56
  -81
  -225
  -376
  -535
  -700
  -872
  -1,052
  -1,238
  -1,432
  -1,633
  -1,843
  -2,060
  -2,286
  -2,520
  -2,764
  -3,018
  -3,282
  -3,556
  -3,842
  -4,140
Change in working capital, $m
  -788
  -281
  -311
  -340
  -369
  -397
  -424
  -451
  -477
  -503
  -528
  -553
  -578
  -603
  -628
  -653
  -679
  -706
  -734
  -763
  -792
  -824
  -857
  -891
  -927
  -966
  -1,006
  -1,048
  -1,093
  -1,140
  -1,190
Cash from operations, $m
  -518
  865
  964
  943
  914
  879
  837
  789
  734
  674
  584
  472
  353
  226
  93
  -47
  -193
  -346
  -504
  -669
  -841
  -1,019
  -1,203
  -1,394
  -1,593
  -1,798
  -2,012
  -2,233
  -2,463
  -2,702
  -2,950
Maintenance CAPEX, $m
  0
  -27
  -32
  -37
  -44
  -50
  -57
  -65
  -73
  -82
  -91
  -101
  -111
  -121
  -132
  -144
  -156
  -168
  -181
  -194
  -208
  -223
  -238
  -253
  -270
  -286
  -304
  -322
  -342
  -361
  -382
New CAPEX, $m
  -122
  -40
  -45
  -49
  -53
  -57
  -61
  -65
  -69
  -72
  -76
  -80
  -83
  -87
  -90
  -94
  -98
  -102
  -106
  -110
  -114
  -119
  -123
  -128
  -133
  -139
  -145
  -151
  -157
  -164
  -171
Cash from investing activities, $m
  -2,982
  -67
  -77
  -86
  -97
  -107
  -118
  -130
  -142
  -154
  -167
  -181
  -194
  -208
  -222
  -238
  -254
  -270
  -287
  -304
  -322
  -342
  -361
  -381
  -403
  -425
  -449
  -473
  -499
  -525
  -553
Free cash flow, $m
  -3,500
  799
  888
  856
  818
  772
  719
  659
  592
  519
  417
  291
  159
  18
  -130
  -285
  -447
  -615
  -791
  -974
  -1,163
  -1,360
  -1,564
  -1,776
  -1,996
  -2,224
  -2,461
  -2,707
  -2,962
  -3,228
  -3,504
Issuance/(repayment) of debt, $m
  2,776
  5,090
  5,623
  6,151
  6,670
  7,178
  7,675
  8,160
  8,634
  9,098
  9,555
  10,007
  10,457
  10,908
  11,362
  11,824
  12,295
  12,780
  13,281
  13,802
  14,344
  14,911
  15,505
  16,129
  16,785
  17,476
  18,205
  18,973
  19,784
  20,639
  21,541
Issuance/(repurchase) of shares, $m
  -119
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  2,692
  5,090
  5,623
  6,151
  6,670
  7,178
  7,675
  8,160
  8,634
  9,098
  9,555
  10,007
  10,457
  10,908
  11,362
  11,824
  12,295
  12,780
  13,281
  13,802
  14,344
  14,911
  15,505
  16,129
  16,785
  17,476
  18,205
  18,973
  19,784
  20,639
  21,541
Total cash flow (excl. dividends), $m
  -838
  5,889
  6,511
  7,007
  7,488
  7,950
  8,394
  8,819
  9,226
  9,618
  9,972
  10,299
  10,616
  10,926
  11,232
  11,539
  11,849
  12,165
  12,490
  12,828
  13,180
  13,550
  13,940
  14,353
  14,789
  15,252
  15,744
  16,267
  16,822
  17,411
  18,037
Retained Cash Flow (-), $m
  -395
  -669
  -738
  -807
  -875
  -942
  -1,007
  -1,071
  -1,133
  -1,194
  -1,254
  -1,313
  -1,372
  -1,431
  -1,491
  -1,552
  -1,613
  -1,677
  -1,743
  -1,811
  -1,882
  -1,957
  -2,035
  -2,116
  -2,203
  -2,293
  -2,389
  -2,490
  -2,596
  -2,708
  -2,827
Prev. year cash balance distribution, $m
 
  1,457
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  6,677
  5,773
  6,200
  6,612
  7,008
  7,387
  7,748
  8,093
  8,424
  8,718
  8,986
  9,243
  9,494
  9,741
  9,987
  10,235
  10,488
  10,748
  11,017
  11,298
  11,594
  11,906
  12,236
  12,587
  12,959
  13,355
  13,777
  14,226
  14,703
  15,211
Discount rate, %
 
  4.80
  5.04
  5.29
  5.56
  5.83
  6.13
  6.43
  6.75
  7.09
  7.45
  7.82
  8.21
  8.62
  9.05
  9.50
  9.98
  10.48
  11.00
  11.55
  12.13
  12.74
  13.37
  14.04
  14.74
  15.48
  16.25
  17.07
  17.92
  18.82
  19.76
PV of cash for distribution, $m
 
  6,371
  5,232
  5,311
  5,326
  5,278
  5,170
  5,008
  4,798
  4,547
  4,251
  3,926
  3,586
  3,241
  2,896
  2,559
  2,234
  1,928
  1,642
  1,380
  1,145
  935
  753
  596
  464
  355
  266
  196
  141
  99
  68
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Raymond James Financial, Inc., a financial holding company, through its subsidiaries, engages in the underwriting, distribution, trading, and brokerage of equity and debt securities, and the sale of mutual funds and other investment products in the United States, Canada, Europe, and internationally. The company operates through Private Client Group, Capital Markets, Asset Management, RJ Bank, and Other segments. The Private Client Group segment provides securities brokerage services, including the sale of equities, mutual funds, fixed income products, and insurance products to their individual clients; and borrowing and lending of securities to and from other broker-dealers, financial institutions, and other counterparties. The Capital Markets segment offers securities brokerage, trading, and research services to institutions with a focus on sale of the United States and Canadian equities and fixed income products; and manages and participates in underwritings, merger and acquisition services, and public finance activities. The Asset Management segment engages in the operations of Eagle, the Eagle Family of Funds, Cougar, the asset management operations of Raymond James & Associates, trust services of Raymond James Trust, and other fee-based asset management programs. The RJ Bank segment originates and purchases commercial and industrial loans, tax-exempt loans, securities based loans, and commercial and residential real estate loans. The Other segment engages in principal capital and private equity activities, including various direct and third party private equity investments; employee investment funds; and private equity funds. Raymond James Financial, Inc. was founded in 1962 and is headquartered in St. Petersburg, Florida.

FINANCIAL RATIOS  of  Raymond James Financial (RJF)

Valuation Ratios
P/E Ratio 19.7
Price to Sales 1.9
Price to Book 2.1
Price to Tangible Book
Price to Cash Flow -20.1
Price to Free Cash Flow -16.3
Growth Rates
Sales Growth Rate 4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 64.9%
Cap. Spend. - 3 Yr. Gr. Rate 10.8%
Financial Strength
Quick Ratio 9
Current Ratio NaN
LT Debt to Equity 46.6%
Total Debt to Equity 50.5%
Interest Coverage 8
Management Effectiveness
Return On Assets 2.1%
Ret/ On Assets - 3 Yr. Avg. 2.2%
Return On Total Capital 7.5%
Ret/ On T. Cap. - 3 Yr. Avg. 7.9%
Return On Equity 11.2%
Return On Equity - 3 Yr. Avg. 11.7%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 96.8%
Gross Margin - 3 Yr. Avg. 96.8%
EBITDA Margin 17.4%
EBITDA Margin - 3 Yr. Avg. 17.7%
Operating Margin 14.1%
Oper. Margin - 3 Yr. Avg. 14.4%
Pre-Tax Margin 14.1%
Pre-Tax Margin - 3 Yr. Avg. 14.4%
Net Profit Margin 9.6%
Net Profit Margin - 3 Yr. Avg. 9.6%
Effective Tax Rate 34.9%
Eff/ Tax Rate - 3 Yr. Avg. 36.8%
Payout Ratio 21.4%

RJF stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the RJF stock intrinsic value calculation we used $5520 million for the last fiscal year's total revenue generated by Raymond James Financial. The default revenue input number comes from 2016 income statement of Raymond James Financial. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our RJF stock valuation model: a) initial revenue growth rate of 19.3% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.8%, whose default value for RJF is calculated based on our internal credit rating of Raymond James Financial, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Raymond James Financial.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of RJF stock the variable cost ratio is equal to 85.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for RJF stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 4.9% for Raymond James Financial.

Corporate tax rate of 27% is the nominal tax rate for Raymond James Financial. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the RJF stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for RJF are equal to 3.8%.

Life of production assets of 7.9 years is the average useful life of capital assets used in Raymond James Financial operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for RJF is equal to -26.4%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $4917 million for Raymond James Financial - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 143.129 million for Raymond James Financial is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Raymond James Financial at the current share price and the inputted number of shares is $10.5 billion.


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COMPANY NEWS

▶ BankUnited regains title as the most profitable bank in Florida   [May-25-17 02:05PM  American City Business Journals]
▶ [$$] Raymond James Nabs $400 Million Merrill Broker   [May-02-17 05:49PM  The Wall Street Journal]
▶ Raymond James posts 2Q profit   [Apr-26-17 07:14PM  Associated Press]
▶ Raymond James strikes $172M deal to buy Kansas City investment manager   [Apr-20-17 08:40AM  American City Business Journals]
▶ Why a major credit agency is keeping an eye on Raymond James   [Apr-18-17 02:05PM  American City Business Journals]
▶ Raymond James agrees to multimillion-dollar settlement in Vermont ski resort suits   [Apr-14-17 12:53PM  American City Business Journals]
▶ New Strong Buy Stocks for April 10th   [Apr-10-17 09:07AM  Zacks]
▶ 3 Tampa Bay companies among America's 'most valuable brands'   [08:00AM  American City Business Journals]
▶ New Strong Buy Stocks for March 29th   [Mar-29-17 10:31AM  Zacks]
▶ Who Will Win the March Madness of Trump Stocks?   [Mar-23-17 05:12PM  Zacks]
▶ Forbes: Eight of the worlds billionaires call Tampa Bay home   [Mar-20-17 02:15PM  at bizjournals.com]
▶ Not Big Enough: Three Stocks Will Be Booted From S&P 500   [Mar-13-17 11:37AM  at The Wall Street Journal]
▶ Raymond James moves into benchmark stock index   [08:05AM  at bizjournals.com]
▶ Raymond James rolls out new ads for March Madness, U.S. Open   [Mar-09-17 02:20PM  at bizjournals.com]
▶ UMs Florida stock index bests S&P 500   [Feb-24-17 08:00AM  at bizjournals.com]
▶ [$$] Raymond James to Begin Testing Robo Adviser in Third Quarter   [Jan-30-17 04:37PM  at The Wall Street Journal]
▶ What Raymond James sees ahead for IPOs   [Jan-27-17 08:00AM  at bizjournals.com]
▶ Raymond James Hits Record Profit   [Jan-26-17 09:45PM  at Barrons.com]
▶ [$$] Raymond James Profit Rises   [06:39PM  at The Wall Street Journal]
▶ [$$] Lovell Minnick Invests in Engage People   [Jan-17-17 12:51PM  at The Wall Street Journal]
▶ St. Petersburg bank raises $10 million   [Jan-12-17 02:20PM  at bizjournals.com]
▶ Meet the new chairman of Raymond James   [Dec-01-16 05:30PM  at bizjournals.com]
Stock chart of RJF Financial statements of RJF Annual reports of RJF
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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