Stifel's Wealth Management Should Be Steady While Institutional Group Could Take Years To Recover

Stifel Financial’s revenue and earnings took a step back in 2022 and 2023, as higher net interest income from tightening monetary policy couldn’t offset the effects of fear of a recession on client assets and investment banking revenue. We currently forecast low revenue growth over the next couple of years. With the uncertainty in the economic environment, both wealth management and investment banking revenue will likely remain subdued. About 20% to 25% of the company’s revenue is from net interest income, and it grew about 80% in 2022 to $900 million, as the Federal Reserve increased interest rates. Net interest income will be a relative area of strength until the Federal Reserve reduces rates in response to either a recession or lower inflation.