Analyst Note| Michael Wong |
In the tough 2022 environment, Stifel Financial reported its second highest annual revenue, which also marked the end of the company’s streak of 26 years of record net revenue. The company reported net income of $625 million, or $5.32 per diluted share, on $4.4 billion of net revenue for 2022. Net revenue declined 7.3% from the previous year, while net income to common shareholders decreased 20.8%. With the wealth management segment having recorded annual results growing revenue 8.7% and operating income 16.7% to $2.8 billion and $1.1 billion, respectively, it was the institutional securities business that caused the overall decline with revenue decreasing 28.6% and operating income 54.5% to $1.5 billion and $254 million, respectively. We don’t anticipate making a material change to our $83 fair value estimate for no-moat Stifel and assess shares are moderately undervalued.