Featured Research

Annual energy outlook: AI provides tailwind for gas, while conviction level on oil remains weak
After two years (2021 and 2022) as the best-performing sector across the S&P 500, Energy has now underperformed for each of the past two years, with 2024 ending mostly in the red. The Energy sector currently sits at only 3% of S&P market cap, but investor sentiment remains above pre-COVID levels. That being said, near-term uncertainty regarding the commodities (namely oil) has left investors with little conviction at the moment.

Energy Stat: No hope left for a 1.5-degree target, and we would say that regardless of how the U.S. election went
Clearly, the Paris Agreement has not succeeded in preventing global heating from topping 1.5 degrees. With that “high ambition” goal out of reach, does the base case goal of 2 degrees still stand a chance? The UN Environment Program predicts that existing climate policies around the world would result in an average global temperature increase of 3.1 degrees Celsius by 2100, versus pre-industrial levels. This outlook is substantially worse than every major climate agreement’s stated objective of limiting global heating to a maximum of 2 degrees, and preferably 1.5 degrees.

Intermediate oil & gas: Money can’t buy happiness, but it can buy back shares
Overall, we think the relative positioning of the small- and mid-cap producer group looks compelling with many of the equities trading at material discounts to both larger-cap peers and underlying resource value. While many of the business models have converged (at least on paper), we think differentiating by asset quality and duration, management track record and alignment, and valuation is a good starting point when coupled with a look at potential needle-moving catalysts.

Banking 2025 outlook: Deregulatory agenda sets the stage for better times ahead
After a solid finish to 2024, which was buoyed by the commencement of the Fed’s easing cycle in September and the presidential election in early November, bank stocks are nearing a proverbial fork in the road as we enter 2025. Investors may be at somewhat of an impasse as valuations are no longer “cheap” when compared to history, but where we expect sector weightings to continue to increase from still-depressed levels should expectations begin to turn into realities.

2025 bank M&A outlook: M&A activity set to accelerate fueled by deregulatory agenda
Looking ahead into 2025, we expect bank M&A activity to accelerate fueled by prospects for a deregulatory agenda that is anticipated to be ushered in by the incoming administration. We also see the fundamental headwinds banks still face as driving increased activity levels. These include still-subdued loan growth, ongoing liquidity/deposit pressures, upward expense creep, succession issues with management teams/boards and still-soft fee revenues, especially mortgage.

Tariffs under Trump: An investor’s playbook
Tariffs and trade are at the center of president-elect Donald Trump’s fiscal and foreign policy agendas, and as his second term approaches, investor interest in their potential scope, timeline, likelihood and impact has grown significantly. Our base case is that tariffs – including those targeted at specific countries, such as China and Mexico, as well as a global tariff – are coming, but the specifics of their implementation remain very much up in the air.

2025 housing outlook
Following November’s election results, we believe investors need to brace for a “higher for longer” view on mortgage rates and housing affordability. With affordability strained, we see entry-level builders with excess spec inventory facing more margin pressure this spring. Pent-up demand is still robust, but the incentives needed to unlock the right monthly payment for first-time buyers will be costly. Meanwhile, move-up and luxury demand should be buoyed by tailwinds from record-high home equity, investment gains, and generational wealth transfers.

2025 REIT outlook: Plenty of catalysts, compelling valuations, and strong balance sheets
REIT earnings growth tends to be more stable vs. the S&P 500 due to contractual leases, high operating margins, low labor intensity, limited supply, and little international exposure. Further, REIT sectors with defensive characteristics outperform in late cycle economies.

Semi-annual media usage trends survey
The Raymond James TMT team recently updated its US media usage survey to assess trends on: 1) video package retention; 2) interest in specific programming; 3) preferred video services; 4) price sensitivity; 5) broadband-related preferences; and 6) consumer usage behavior.

A primer on ITOps: From back office to the forefront
ITOps has historically been confined to back-office support functions that were generally viewed as a cost center for most customers. We believe this industry is undergoing a marked shift alongside the increased adoption of AI technology that has significantly expanded the value proposition and total addressable market opportunity. In this report, we define the core ITOps market and provide a visual roadmap for investors to think about various adjacencies, competitive dynamics and sizes of each submarket that comprises total ITOps.

AI infrastructure value chain: deep learning on parts benefitting from multi-year build and capex cycle
Our report lays out a framework for thinking about the AI boom from a supply chain perspective. We discuss how the demand for AI flows across multiple sectors (many not often associated with AI) including energy, industrials, data centers, wireless and fiber networks, telecommunications services, home broadband, media, software, chips, and communications infrastructure.