In a report released yesterday, Ryan Kenny from Morgan Stanley maintained a Hold rating on Jefferies, with a price target of $74.00.
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Ryan Kenny has given his Hold rating due to a combination of factors impacting Jefferies Financial Group. Despite the company’s limited direct exposure to First Brands, which is only a small fraction of its tangible book value, the market has reacted negatively due to concerns over potential legal and reputational risks, as well as issues related to conflict controls and disclosure practices.
While Jefferies presented a positive outlook during its Investor Day, highlighting strong business performance and growth prospects, there remain unanswered questions about the First Brands situation and whether risk mitigation could have been improved. Additionally, although Jefferies is expected to experience significant EPS growth as capital markets recover, concerns about declining revenue growth in credit fixed income trading and broader market credit risks contribute to the cautious Hold rating. The valuation metrics, while attractive in some respects, also present challenges when compared to the tangible book value, further supporting the Hold stance.
Kenny covers the Financial sector, focusing on stocks such as Jefferies, Lazard, and SEI Investments Company. According to TipRanks, Kenny has an average return of -2.1% and a 39.08% success rate on recommended stocks.
In another report released yesterday, BMO Capital also maintained a Hold rating on the stock with a $55.00 price target.