Stifel Financial shares rise on analyst's optimism (AP)
Fri, 12 Jun 2009 20:22:52 Etc/GM
In adding Stifel to the "Americas Conviction Buy List," analyst Daniel Harris wrote that the company offers "an attractive mix of retail and institutional capital markets exposure, which should benefit in the current environment and offer steady growth over the next 12 months."
After markets closed Thursday, the St. Louis-based parent of Stifel Nicolaus & Co. announced the completion of a stock offering that raised about $45 million.
Shares of Stifel rose $1.68, or 3.8 percent, to close at $45.88 Friday, near the middle of its 52-week range of $29.13 to $60.61.
Harris set a $55 six-month price target for the stock.
"Stifel trades at a premium to its historic price/earnings multiple, but we believe the premium is warranted given above average growth prospects over the next few years," Harris wrote in a research note Thursday.
Harris said Stifel should benefit from recent positive trends in capital markets, noting the company generates about 38 percent of its revenue from trading and 7 percent from investment banking. Meanwhile, recent market gains should boost Stifel's retail brokerage assets, he said.
Harris said Stifel appears to be on track with plans announced in March to acquire up to 55 UBS Wealth Management Americas branches from UBS Financial Services Inc., and close the transaction in the third quarter. The branches generate around $120 million in annual revenue, and client assets "will immediately move into the Stifel brokerage upon the transition," Harris said.
Harris also cited as a positive Stifel's announcement that it had completed an "at the money" offering of 100 million of its shares at an average price of $45 apiece.
Harris said he expects the proceeds "will be targeted at continuing the pace of hiring independent and break-away brokers.
"Given Stifel's healthy balance sheet and attractive equity currency, we believe it may also look to make plug-in acquisitions in investment banking as well as team lift-outs in various capital markets businesses," Harris said.
source: http://biz.yahoo.com/ap/090612/us_stifel_financial_mover.html?.v=1