Several financial companies released earnings reports yesterday and this morning, sending stocks both higher and lower. Shares of the investment bank Raymond James(NYSE: RJF) traded 6.6% higher as of midafternoon. Shares of the large life and health insurance company Globe Life (NYSE: GL) traded slightly down, while shares of the data and analytics giant S&P Global(NYSE: SPGI) fell 2.3%.
Earnings season has arrived
Raymond James stock continued its nice run this year after the company reported earnings per share (EPS) of $2.95 on revenue of $3.46 billion, easily topping consensus estimates on both fronts. The company benefited from a strong quarter in investment banking, reporting $315 million of revenue in the unit. Consensus estimates had only been modeling $202 million heading into the quarter, according to Visible Alpha.
Meanwhile, Deutsche Bank analyst Matt O'Connor upgraded the stock to a buy rating and raised his price target to $26. O'Connor changed his discount on Raymond James to just 5% against peers, versus 10% to 15% prior, citing less risk for the stock. Other analysts also raised their price targets on the stock this morning.
Globe Life reported $3.44 in diluted earnings per share on revenue of $1.46 billion, beating consensus analyst estimates of $3.03 easily, according to Visible Alpha. Revenue came in line with estimates, while expenses came in 3.3% lower than consensus. Net investment income also jumped nearly 7% year over year.
S&P Global reported diluted earnings per share of $3.11, or $3.89 on an adjusted basis. Revenue for the company's third quarter came in at $3.58 billion. Both numbers beat analyst estimates. Additionally, management on the company's earnings call said S&P Global has repurchased $2 billion in shares this year and has plans to repurchase an additional $1.3 billion by the end of the year.
The company's full-year 2024 guidance for diluted and adjusted diluted EPS came in ahead of consensus, according to Visible Alpha. However, investors on the conference call seemed concerned about management lowering the high range of guidance for revenue in the company's mobility unit, which provides data to the automotive industry. Management attributed the lower guidance to headwinds in the non-subscription part of the business.
Who did well?
I think Raymond James is an obvious winner here and should benefit if interest rates keep coming down, largely because investment banking and capital markets activity should continue to pick up. Despite shares being down, I didn't see a lot to complain about in S&P's earnings. They beat consensus and raised guidance. The guidance is based on economic forecasts though, so perhaps investors felt the company's economic projections were too aggressive or unrealistic.
Globe Life did grow earnings in the quarter but the stock has struggled this year after a short report in April alleged the company had been involved in fraud and misconduct. I plan to avoid the stock for now, although analysts have grown increasingly bullish.
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Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends S&P Global. The Motley Fool has a disclosure policy.
