Stifel Earnings: Wealth Management Steady; Capital Markets Struggling but Will Eventually Recover

Stifel's wealth management segment reported record revenue, but the capital markets business isn't experiencing a recovery yet. The company reported net income to common shareholders of $59 million, or $0.52 per diluted share, on $1.05 billion of net revenues. Similar to other investment banks, Stifel had elevated legal and regulatory charges in the quarter that included provisions for the SEC regarding record-keeping. Excluding the $67 million of charges would add about $0.58 to EPS. We don't anticipate making a material change to our $72 fair value estimate for no-moat-rated Stifel Financial and assess shares are modestly undervalued.