Increasing Our Fair Value Estimate for Stifel to $86

We are increasing our fair value estimate for no-moat Stifel Financial to $86 from $71 per share. Our fair value estimate implies an adjusted forward price/earnings multiple of about 12 times and a price/book ratio of 2.1 times. Of the $15 increase in our fair value estimate, $11 is from increasing our modeled operating margins for the company by over 2-percentage points, $3 is from forecasting higher net interest income, and a net $1 is from miscellaneous changes, such as changing assumptions for investment banking revenue, client asset growth, and the balance sheet.