Ryan Kenny, an analyst from Morgan Stanley, maintained the Hold rating on Jefferies (JEF – Research Report). The associated price target was lowered to $54.00.
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Ryan Kenny has given his Hold rating due to a combination of factors that reflect both positive and negative aspects of Jefferies’ recent performance. On the positive side, the company experienced near-record growth in equities trading and a significant increase in advisory services, which suggests a strengthening market position and improving deal conditions. The management’s commentary also highlighted a renewed investor confidence and a resilient global economy, which are encouraging signs for future performance.
However, there are notable challenges that temper the optimism. Jefferies reported a shortfall in earnings per share compared to consensus expectations, primarily due to weaker fixed income trading and other investment banking activities. Additionally, the increase in non-compensation expenses and the reliance on non-core investment returns for improvements in the compensation ratio raise concerns about sustainability. These mixed results, combined with a lowered price target, justify a cautious Hold rating as the market continues to digest these developments.