Assessing Stifel Financial (SF) Valuation After Recent Share Price Weakness

Why Stifel Financial is on investors’ radar

Stifel Financial (SF) has drawn investor attention after recent share price moves, with the stock showing mixed returns over the past week, month and past 3 months, alongside positive annual revenue and net income growth.

See our latest analysis for Stifel Financial.

At a share price of $76.89, Stifel Financial has seen recent pressure, with a 7 day share price return of a 4.79% decline and a 90 day share price return of a 10.11% decline, even as the 1 year total shareholder return stands at 36.86%, suggesting longer term holders have had a very different experience from recent traders.

If this mix of short term swings and stronger long term total shareholder returns has you thinking about where else capital could work, it may be worth scanning 17 top founder-led companies

With annual revenue of US$5.7b, net income of US$844.9m and shares trading at US$76.89, the key question is whether Stifel Financial is still undervalued or if the market is already pricing in future growth.

Most Popular Narrative: 12.9% Undervalued

At $76.89, the most followed narrative on Stifel Financial pegs fair value at $88.25, implying a gap that this narrative tries to explain through its growth and profitability assumptions.

The analysts have a consensus price target of $88.25 for Stifel Financial based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $103.0 and the most bearish reporting a price target of $80.0.

Read the complete narrative.

Want to understand why this fair value sits above today’s price? The narrative leans heavily on stronger profitability, steadier revenue progress and a richer earnings multiple than you might expect. The exact mix of growth, margins and required return tells its own story.

Result: Fair Value of $88.25 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, the narrative could change quickly if ERISA litigation expenses rise, or if weaker loan demand and asset outflows weigh on Wealth Management revenue and margins.

Find out about the key risks to this Stifel Financial narrative.

Another Way to Look at Value

The analyst narrative leans on earnings growth and a future P/E of about 14x to argue Stifel Financial is undervalued. Yet Simply Wall St’s DCF model points to a fair value of $70.82, which is below the current $76.89 share price, implying the stock screens as overvalued on cash flows. That kind of gap can signal either a cautious cash flow view or overly optimistic earnings multiples. The key question is which one you place more weight on.

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Stifel Financial for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 54 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

Curious whether the mixed valuation signals line up with your own expectations for Stifel Financial? Take a closer look yourself and weigh what matters most to you, then check out 4 key rewards

Looking for more investment ideas?

If Stifel Financial has sharpened your thinking, do not stop there. The broader market is full of other ideas that could better match your risk and return preferences.

• Scan for resilient cash generators by checking companies in the solid balance sheet and fundamentals stocks screener (42 results) that may suit a more quality focused approach.
• Hunt for potential mispricing by reviewing the 54 high quality undervalued stocks that fit tighter fundamentals without stretching expectations.
• Target income focused opportunities by reviewing the 13 dividend fortresses that offer higher yields supported by more robust profiles.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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