Why This Raymond James Analyst Sees Upside To $110

The bearish case for financial services firm Raymond James Financial, Inc. RJF has come to an end, and the stock's risk to reward profile is "skewing increasingly more positive," according to Goldman Sachs analysts.

The Raymond James Analyst: Alexander Blostein upgraded Raymond James from Sell to Buy with a price target lifted from $82 to $110.

The Raymond James Thesis: Raymond James boast three catalysts that will help lift the stock higher by around 15%, Blostein wrote in the upgrade note. They are: 

1). Headwinds stemming from lower interest rates and higher credit costs are "largely in the run-rate."

2). The firm's Wealth Management business has recovered from 2020 lows and has a strong outlook.

3). An improved outlook for the M&A and Advisory business that will help support Capital Markets revenue above 2019 levels.

Related Link: Benzinga's Top Upgrades, Downgrades For January 5, 2021

These three catalysts, coupled with Raymond James' expense initiatives, will help keep the company's comp rate below management's 70% target in 2021 and help generate a pre-tax margin of around 15%, the analyst said.

As such, now might be a good time to buy Raymond James' stock after it gained just 6% in 2020 versus two close peers that averaged a 20% gain last year, according to Goldman Sachs. 

Price Action: Shares of Raymond James Financial ended Tuesday's session up 0.39% at $94.40.