Intrinsic value of Raymond James Financial - RJF

Previous Close

$95.07

  Intrinsic Value

$39.32

stock screener

  Rating & Target

str. sell

-59%

Previous close

$95.07

 
Intrinsic value

$39.32

 
Up/down potential

-59%

 
Rating

str. sell

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

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 2017), $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 13.6

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   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
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  17.90
  16.61
  15.45
  14.40
  13.46
  12.62
  11.86
  11.17
  10.55
  10.00
  9.50
  9.05
  8.64
  8.28
  7.95
  7.66
  7.39
  7.15
  6.94
  6.74
  6.57
  6.41
  6.27
  6.14
  6.03
  5.93
  5.83
  5.75
  5.68
  5.61
Revenue, $m
  7,511
  8,759
  10,112
  11,569
  13,126
  14,783
  16,535
  18,382
  20,322
  22,354
  24,477
  26,692
  28,999
  31,399
  33,896
  36,491
  39,188
  41,990
  44,903
  47,931
  51,079
  54,354
  57,762
  61,311
  65,007
  68,859
  72,876
  77,067
  81,440
  86,007
Variable operating expenses, $m
  6,147
  7,066
  8,062
  9,135
  10,282
  11,502
  12,792
  14,153
  15,581
  17,077
  18,026
  19,657
  21,356
  23,124
  24,962
  26,873
  28,860
  30,923
  33,068
  35,298
  37,616
  40,028
  42,538
  45,151
  47,874
  50,711
  53,669
  56,755
  59,976
  63,339
Fixed operating expenses, $m
  96
  98
  100
  103
  105
  107
  109
  112
  114
  117
  119
  122
  125
  127
  130
  133
  136
  139
  142
  145
  148
  152
  155
  158
  162
  166
  169
  173
  177
  181
Total operating expenses, $m
  6,243
  7,164
  8,162
  9,238
  10,387
  11,609
  12,901
  14,265
  15,695
  17,194
  18,145
  19,779
  21,481
  23,251
  25,092
  27,006
  28,996
  31,062
  33,210
  35,443
  37,764
  40,180
  42,693
  45,309
  48,036
  50,877
  53,838
  56,928
  60,153
  63,520
Operating income, $m
  1,268
  1,595
  1,950
  2,331
  2,740
  3,174
  3,633
  4,118
  4,627
  5,160
  6,332
  6,913
  7,518
  8,148
  8,803
  9,485
  10,192
  10,928
  11,693
  12,487
  13,314
  14,174
  15,069
  16,001
  16,971
  17,983
  19,038
  20,139
  21,288
  22,488
EBITDA, $m
  6,590
  7,698
  8,900
  10,194
  11,579
  13,050
  14,608
  16,249
  17,974
  19,779
  21,667
  23,635
  25,686
  27,820
  30,039
  32,346
  34,744
  37,235
  39,824
  42,516
  45,315
  48,227
  51,257
  54,412
  57,698
  61,124
  64,695
  68,421
  72,310
  76,371
Interest expense (income), $m
  156
  1,378
  1,436
  1,605
  1,789
  1,986
  2,197
  2,421
  2,658
  2,908
  3,171
  3,446
  3,733
  4,033
  4,345
  4,670
  5,008
  5,360
  5,725
  6,104
  6,498
  6,908
  7,334
  7,778
  8,239
  8,720
  9,220
  9,741
  10,285
  10,853
  11,445
Earnings before tax, $m
  -109
  159
  344
  543
  754
  977
  1,213
  1,460
  1,719
  1,989
  2,886
  3,180
  3,485
  3,803
  4,133
  4,476
  4,833
  5,203
  5,589
  5,989
  6,406
  6,840
  7,291
  7,762
  8,252
  8,763
  9,297
  9,854
  10,435
  11,043
Tax expense, $m
  0
  43
  93
  147
  204
  264
  327
  394
  464
  537
  779
  859
  941
  1,027
  1,116
  1,209
  1,305
  1,405
  1,509
  1,617
  1,730
  1,847
  1,969
  2,096
  2,228
  2,366
  2,510
  2,661
  2,818
  2,982
Net income, $m
  -109
  116
  251
  396
  550
  713
  885
  1,066
  1,255
  1,452
  2,107
  2,321
  2,544
  2,776
  3,017
  3,268
  3,528
  3,798
  4,080
  4,372
  4,676
  4,993
  5,322
  5,666
  6,024
  6,397
  6,787
  7,193
  7,618
  8,061

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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 assets, $m
  20,923
  24,398
  28,168
  32,225
  36,564
  41,177
  46,059
  51,204
  56,607
  62,267
  68,181
  74,350
  80,776
  87,464
  94,418
  101,647
  109,159
  116,965
  125,078
  133,512
  142,281
  151,403
  160,897
  170,781
  181,078
  191,809
  202,998
  214,670
  226,853
  239,574
Adjusted assets (=assets-cash), $m
  20,923
  24,398
  28,168
  32,225
  36,564
  41,177
  46,059
  51,204
  56,607
  62,267
  68,181
  74,350
  80,776
  87,464
  94,418
  101,647
  109,159
  116,965
  125,078
  133,512
  142,281
  151,403
  160,897
  170,781
  181,078
  191,809
  202,998
  214,670
  226,853
  239,574
Revenue / Adjusted assets
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
  0.359
Average production assets, $m
  47,059
  54,875
  63,353
  72,479
  82,237
  92,613
  103,593
  115,164
  127,318
  140,046
  153,348
  167,223
  181,677
  196,718
  212,359
  228,617
  245,513
  263,070
  281,318
  300,286
  320,009
  340,527
  361,879
  384,111
  407,268
  431,404
  456,569
  482,823
  510,224
  538,835
Working capital, $m
  -33,831
  -39,451
  -45,546
  -52,106
  -59,121
  -66,581
  -74,474
  -82,793
  -91,530
  -100,681
  -110,244
  -120,219
  -130,610
  -141,423
  -152,668
  -164,356
  -176,503
  -189,125
  -202,243
  -215,880
  -230,059
  -244,810
  -260,160
  -276,143
  -292,791
  -310,142
  -328,234
  -347,108
  -366,807
  -387,376
Total debt, $m
  26,600
  29,728
  33,120
  36,772
  40,677
  44,829
  49,222
  53,853
  58,716
  63,809
  69,132
  74,684
  80,468
  86,487
  92,746
  99,251
  106,012
  113,038
  120,340
  127,930
  135,822
  144,033
  152,577
  161,473
  170,739
  180,397
  190,467
  200,973
  211,937
  223,386
Total liabilities, $m
  18,831
  21,959
  25,351
  29,003
  32,907
  37,059
  41,453
  46,083
  50,947
  56,040
  61,363
  66,915
  72,699
  78,717
  84,976
  91,482
  98,243
  105,269
  112,570
  120,160
  128,053
  136,263
  144,807
  153,703
  162,970
  172,628
  182,698
  193,203
  204,168
  215,617
Total equity, $m
  2,092
  2,440
  2,817
  3,223
  3,656
  4,118
  4,606
  5,120
  5,661
  6,227
  6,818
  7,435
  8,078
  8,746
  9,442
  10,165
  10,916
  11,697
  12,508
  13,351
  14,228
  15,140
  16,090
  17,078
  18,108
  19,181
  20,300
  21,467
  22,685
  23,957
Total liabilities and equity, $m
  20,923
  24,399
  28,168
  32,226
  36,563
  41,177
  46,059
  51,203
  56,608
  62,267
  68,181
  74,350
  80,777
  87,463
  94,418
  101,647
  109,159
  116,966
  125,078
  133,511
  142,281
  151,403
  160,897
  170,781
  181,078
  191,809
  202,998
  214,670
  226,853
  239,574
Debt-to-equity ratio
  12.710
  12.180
  11.760
  11.410
  11.120
  10.890
  10.690
  10.520
  10.370
  10.250
  10.140
  10.040
  9.960
  9.890
  9.820
  9.760
  9.710
  9.660
  9.620
  9.580
  9.550
  9.510
  9.480
  9.450
  9.430
  9.410
  9.380
  9.360
  9.340
  9.320
Adjusted equity ratio
  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
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -109
  116
  251
  396
  550
  713
  885
  1,066
  1,255
  1,452
  2,107
  2,321
  2,544
  2,776
  3,017
  3,268
  3,528
  3,798
  4,080
  4,372
  4,676
  4,993
  5,322
  5,666
  6,024
  6,397
  6,787
  7,193
  7,618
  8,061
Depreciation, amort., depletion, $m
  5,321
  6,103
  6,951
  7,863
  8,839
  9,877
  10,974
  12,132
  13,347
  14,620
  15,335
  16,722
  18,168
  19,672
  21,236
  22,862
  24,551
  26,307
  28,132
  30,029
  32,001
  34,053
  36,188
  38,411
  40,727
  43,140
  45,657
  48,282
  51,022
  53,883
Funds from operations, $m
  5,212
  6,219
  7,202
  8,259
  9,389
  10,590
  11,860
  13,197
  14,601
  16,072
  17,442
  19,044
  20,712
  22,448
  24,253
  26,129
  28,079
  30,106
  32,211
  34,401
  36,677
  39,046
  41,510
  44,077
  46,751
  49,538
  52,444
  55,476
  58,640
  61,945
Change in working capital, $m
  -5,136
  -5,619
  -6,095
  -6,560
  -7,015
  -7,460
  -7,894
  -8,319
  -8,737
  -9,151
  -9,563
  -9,975
  -10,391
  -10,813
  -11,245
  -11,688
  -12,147
  -12,622
  -13,118
  -13,636
  -14,180
  -14,750
  -15,350
  -15,982
  -16,649
  -17,351
  -18,092
  -18,874
  -19,699
  -20,569
Cash from operations, $m
  10,348
  11,838
  13,297
  14,820
  16,405
  18,049
  19,753
  21,516
  23,339
  25,223
  27,004
  29,019
  31,103
  33,261
  35,498
  37,818
  40,226
  42,728
  45,330
  48,037
  50,857
  53,796
  56,861
  60,059
  63,399
  66,889
  70,536
  74,349
  78,339
  82,514
Maintenance CAPEX, $m
  -3,991
  -4,706
  -5,488
  -6,335
  -7,248
  -8,224
  -9,261
  -10,359
  -11,516
  -12,732
  -14,005
  -15,335
  -16,722
  -18,168
  -19,672
  -21,236
  -22,862
  -24,551
  -26,307
  -28,132
  -30,029
  -32,001
  -34,053
  -36,188
  -38,411
  -40,727
  -43,140
  -45,657
  -48,282
  -51,022
New CAPEX, $m
  -7,144
  -7,816
  -8,478
  -9,125
  -9,758
  -10,376
  -10,980
  -11,571
  -12,153
  -12,729
  -13,302
  -13,875
  -14,454
  -15,041
  -15,641
  -16,258
  -16,896
  -17,558
  -18,247
  -18,968
  -19,724
  -20,517
  -21,352
  -22,231
  -23,158
  -24,135
  -25,166
  -26,253
  -27,401
  -28,611
Cash from investing activities, $m
  -11,135
  -12,522
  -13,966
  -15,460
  -17,006
  -18,600
  -20,241
  -21,930
  -23,669
  -25,461
  -27,307
  -29,210
  -31,176
  -33,209
  -35,313
  -37,494
  -39,758
  -42,109
  -44,554
  -47,100
  -49,753
  -52,518
  -55,405
  -58,419
  -61,569
  -64,862
  -68,306
  -71,910
  -75,683
  -79,633
Free cash flow, $m
  -788
  -684
  -669
  -641
  -602
  -550
  -488
  -415
  -331
  -238
  -302
  -191
  -73
  52
  185
  324
  468
  619
  775
  937
  1,105
  1,277
  1,456
  1,640
  1,830
  2,027
  2,230
  2,439
  2,656
  2,880
Issuance/(repayment) of debt, $m
  1,083
  3,128
  3,392
  3,652
  3,905
  4,152
  4,394
  4,630
  4,863
  5,094
  5,323
  5,552
  5,784
  6,019
  6,259
  6,506
  6,761
  7,026
  7,302
  7,590
  7,893
  8,210
  8,544
  8,896
  9,267
  9,658
  10,070
  10,505
  10,965
  11,449
Issuance/(repurchase) of shares, $m
  2,217
  232
  126
  9
  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  
  3,300
  3,360
  3,518
  3,661
  3,905
  4,152
  4,394
  4,630
  4,863
  5,094
  5,323
  5,552
  5,784
  6,019
  6,259
  6,506
  6,761
  7,026
  7,302
  7,590
  7,893
  8,210
  8,544
  8,896
  9,267
  9,658
  10,070
  10,505
  10,965
  11,449
Total cash flow (excl. dividends), $m
  2,513
  2,675
  2,849
  3,020
  3,303
  3,602
  3,906
  4,216
  4,532
  4,856
  5,021
  5,361
  5,711
  6,071
  6,444
  6,829
  7,229
  7,645
  8,077
  8,527
  8,997
  9,488
  10,000
  10,536
  11,097
  11,684
  12,300
  12,945
  13,620
  14,329
Retained Cash Flow (-), $m
  -2,217
  -348
  -377
  -406
  -434
  -461
  -488
  -514
  -540
  -566
  -591
  -617
  -643
  -669
  -695
  -723
  -751
  -781
  -811
  -843
  -877
  -912
  -949
  -988
  -1,030
  -1,073
  -1,119
  -1,167
  -1,218
  -1,272
Prev. year cash balance distribution, $m
  15
  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
  108
  128
  149
  172
  197
  223
  251
  281
  312
  345
  380
  416
  454
  493
  534
  576
  620
  666
  714
  763
  815
  868
  924
  982
  1,042
  1,105
  1,171
  1,239
  1,310
  1,384
Cash available for distribution, $m
  311
  2,328
  2,472
  2,614
  2,869
  3,140
  3,418
  3,701
  3,992
  4,290
  4,429
  4,744
  5,068
  5,402
  5,748
  6,106
  6,478
  6,864
  7,266
  7,684
  8,120
  8,575
  9,051
  9,548
  10,067
  10,611
  11,181
  11,777
  12,402
  13,057
Discount rate, %
  13.50
  14.18
  14.88
  15.63
  16.41
  17.23
  18.09
  19.00
  19.95
  20.94
  21.99
  23.09
  24.24
  25.46
  26.73
  28.07
  29.47
  30.94
  32.49
  34.11
  35.82
  37.61
  39.49
  41.47
  43.54
  45.72
  48.00
  50.40
  52.92
  55.57
PV of cash for distribution, $m
  274
  1,785
  1,631
  1,463
  1,342
  1,210
  1,067
  921
  777
  641
  497
  392
  301
  226
  165
  117
  80
  54
  35
  22
  13
  8
  4
  2
  1
  1
  0
  0
  0
  0
Current shareholders' claim on cash, %
  50.0
  45.0
  42.8
  42.7
  42.7
  42.7
  42.7
  42.7
  42.7
  42.7
  42.7
  42.7
  42.7
  42.7
  42.7
  42.7
  42.7
  42.7
  42.7
  42.7
  42.7
  42.7
  42.7
  42.7
  42.7
  42.7
  42.7
  42.7
  42.7
  42.7

Raymond James Financial, Inc. (RJF) is a financial holding company. The Company's subsidiaries include Raymond James & Associates, Inc. (RJ&A), Raymond James Financial Services, Inc. (RJFS), Raymond James Financial Services Advisors, Inc. (RJFSA), Raymond James Ltd. (RJ Ltd.), Eagle Asset Management, Inc. (Eagle), and Raymond James Bank, N.A. (RJ Bank). It operates through five segments: Private Client Group (PCG), Capital Markets, Asset Management, RJ Bank and the Other segment. The Private Client Group segment includes the retail branches of the Company's broker-dealer subsidiaries located throughout the United States, Canada and the United Kingdom. The Capital Markets segment includes institutional sales and trading in the United States, Canada and Europe. The Asset Management segment includes the operations of Eagle, the Eagle Family of Funds and other fee-based asset management programs. RJ Bank segment provides corporate loan, securities based loans (SB) and residential loans.

FINANCIAL RATIOS  of  Raymond James Financial (RJF)

Valuation Ratios
P/E Ratio 21.5
Price to Sales 2.1
Price to Book 2.5
Price to Tangible Book
Price to Cash Flow 10.5
Price to Free Cash Flow 12.3
Growth Rates
Sales Growth Rate 18.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 55.7%
Cap. Spend. - 3 Yr. Gr. Rate 25.9%
Financial Strength
Quick Ratio 0
Current Ratio NaN
LT Debt to Equity 54.9%
Total Debt to Equity 376.5%
Interest Coverage 7
Management Effectiveness
Return On Assets 2.2%
Ret/ On Assets - 3 Yr. Avg. 2.2%
Return On Total Capital 2.6%
Ret/ On T. Cap. - 3 Yr. Avg. 2.7%
Return On Equity 12.1%
Return On Equity - 3 Yr. Avg. 11.6%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 96.4%
Gross Margin - 3 Yr. Avg. 96.7%
EBITDA Margin 17.9%
EBITDA Margin - 3 Yr. Avg. 18%
Operating Margin 14.2%
Oper. Margin - 3 Yr. Avg. 14.5%
Pre-Tax Margin 14.2%
Pre-Tax Margin - 3 Yr. Avg. 14.5%
Net Profit Margin 9.7%
Net Profit Margin - 3 Yr. Avg. 9.6%
Effective Tax Rate 31.1%
Eff/ Tax Rate - 3 Yr. Avg. 34.2%
Payout Ratio 20%

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 $6371 million for the last fiscal year's total revenue generated by Raymond James Financial. The default revenue input number comes from 2017 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 17.9% 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 13.5%, 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 83.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $94 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 5.4% 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 1.7%.

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 626.5%.

Life of production assets of 10 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 -450.4%. 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 - $0 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 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 $13.6 billion.

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COMPANY NEWS

▶ Americans increasing optimism about the economy   [Jun-22-18 02:16PM  Fox Business Videos]
▶ The Market Challenges of a Flattening Yield Curve   [May-01-18 09:53AM  Bloomberg Video]
▶ Longtime Raymond James executive plans a new career chapter   [Apr-18-18 11:57AM  American City Business Journals]
▶ Well-known Tampa Bay banker retires from Raymond James Bank   [Apr-16-18 02:17PM  American City Business Journals]
▶ Raymond James sues Downtown landlord, alleging 'dangerously unsafe' elevators   [Apr-12-18 03:13PM  American City Business Journals]
▶ Cool Digs: Inside Alex. Brown's Harbor East offices   [08:26AM  American City Business Journals]
▶ Tampa Bay metro area tops the state in job openings   [Mar-23-18 02:33PM  American City Business Journals]
▶ Why Shares of Pandora Media Surged Today   [Mar-22-18 04:25PM  Motley Fool]
▶ Raymond James names former Disney veteran to board of directors   [07:35AM  American City Business Journals]
▶ Energy Stocks Sink Most Since March 2016   [Feb-05-18 12:14PM  Bloomberg Video]
▶ Analysts Post-1Q18 Views on TD Ameritrade   [Jan-26-18 10:33AM  Market Realist]
▶ What Could Improve TD Ameritrades Valuation   [09:04AM  Market Realist]
▶ TD Ameritrades Move Could Help Investors   [07:36AM  Market Realist]
▶ Raymond James, Ameriprise Embrace Broker Protocol   [Jan-25-18 06:25PM  Barrons.com]
▶ PPG Industries: Analysts Views and Recommendations   [Jan-12-18 10:40AM  Market Realist]
▶ Raymond James expects Q1 earnings to take hit from new tax law   [Jan-11-18 02:00PM  American City Business Journals]
▶ Stocks With Rising Relative Strength: Raymond James Financial   [Jan-10-18 03:00AM  Investor's Business Daily]
▶ Traffic updates at Carillon bring 650 new jobs to Raymond James   [02:10PM  American City Business Journals]
▶ Raymond James sues Lowes over investment banking deal   [Jan-05-18 02:52PM  American City Business Journals]
▶ U.S. Spending Edges Higher With Inflation in Nov.   [Dec-22-17 10:20AM  Bloomberg Video]
▶ Interactive Brokers Commences Bitcoin Futures Trading   [Dec-19-17 07:32AM  Market Realist]
▶ JPMorgan Chase to offer discounts like Amazon   [Dec-08-17 11:08AM  Yahoo Finance Video]
▶ Bitcoin continues onward and upward   [11:09AM  Yahoo Finance Video]
▶ Raymond James wraps up $173M deal   [Nov-20-17 02:55PM  American City Business Journals]
▶ Raymond James CEO on Expansion Push, Tax Reform   [Nov-17-17 04:33PM  Bloomberg Video]
▶ Stocks With Rising Relative Strength: Raymond James Financial   [Nov-03-17 03:00AM  Investor's Business Daily]
▶ Giddis Says Market Moving Data Will Come Later This Week   [Oct-30-17 11:23AM  Bloomberg Video]
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