Analysts at Wolfe Research downgraded Raymond James Financial (NYSE:) and JPMorgan (NYSE:) to Peer Perform from Outperform and State Street (NYSE:) to Underperform from Peer Perform in separate notes Monday.
The firm said that while it has been positive on RJF since January 2021, with the company remaining well-positioned to continue to capture meaningful upside from secular tailwinds in Wealth, they see emerging risks.
These include the negative revision risk, the risk of a negative surprise on the comp ratio, heavier short-end gearing, and poor NNA optics.
For JPMorgan, Wolfe Research explained that with the bank’s valuation approaching all-time highs and being more exposed to NII headwinds from lower rates, they “are taking some chips off the table.”
State Street was given a price target of $73 per share. Wolfe Research analysts see room for further underperformance driven primarily by negative earnings revisions as they believe consensus EPS forecasts are “much too high.”
“We are -10% below consensus for 2025E and as much as -20% below for 2026E,” said the firm. This is driven by weaker NII, lower fee growth, and less capital return capacity.
“We do not see a credible path to >$10 EPS over the next three years and see real risk that consensus will have to be revised meaningfully lower,” they conclude.
