Jefferies (JEF) AI Stock Analysis

• Market Cap: $11.87B
• Dividend Yield: 2.57%
• Average Volume (3M): 1.68M
• Price to Earnings (P/E): 21.8
• Beta (1Y): 1.46
• Revenue Growth: 1.00%
• EPS Growth: 46.98%
• Country: US
• Employees: 7,701
• Sector: Financial
• Sector Strength: 73
• Industry: Financial - Capital Markets
• EPS (TTM): 0.40
• Shares Outstanding: 206,280,230
• 10 Day Avg. Volume: 1,465,298
• 30 Day Avg. Volume: 1,684,182
• PEG Ratio: -2.24
• Price to Book (P/B): 1.16
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -4.17
• Enterprise Value/Market Cap: 0.03
• Enterprise Value/Revenue: <0.01
• Enterprise Value/Gross Profit: 0.06
• Enterprise Value/Ebitda: 0.02
• 1Y Price Target: $57.00
• Price Target Upside: -2.33% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 68 Neutral
• Price Target: $63.00 ▲(7.95%Upside)

Jefferies' stock score is supported by strong financial performance characterized by high profitability and operational efficiency, despite challenges in revenue growth and cash flow. The positive technical indicators suggest bullish momentum, though caution is warranted due to overbought signals. The valuation highlights a moderately high P/E ratio, balanced by a solid dividend yield.

Positive Factors

Backlog Improvement

JEF's backlog has improved year to date by 32%, which is higher than the average for investment banks and the industry.

Equities Trading

Near-record Equities trading increased by 24% year-over-year and strong Advisory grew by 61% year-over-year.

Investor Confidence

Investor confidence began to restore as clarity came to the economy and markets, resulting in increased momentum for Jefferies Group.

Negative Factors

Earnings Miss

JEF reported EPS of 57c vs. consensus of 94c (-39%).

Investment Banking Recovery

A weaker response to these earnings is expected due to a slower recovery in investment banking, limiting near-term margin expansion.

Revenue Decline

JEF missed revenues across the board, with significant declines in IB, Trading, and Asset Management compared to consensus.

Jefferies Business Overview & Revenue Model

Company Description

Jefferies Financial Group Inc. (NYSE: JEF) is a diversified financial services company headquartered in New York City. It operates through two primary segments: Investment Banking and Capital Markets, and Merchant Banking. The firm provides a range of financial services including mergers and acquisitions advisory, underwriting, and trading of equities and fixed income products, as well as asset management services. Jefferies is known for its expertise in investment banking, particularly with middle-market companies, and has a robust presence in the global markets.

How the Company Makes Money

Jefferies primarily generates revenue through its investment banking and capital markets operations. In investment banking, it earns fees from advising clients on mergers and acquisitions, as well as from underwriting services for debt and equity offerings. The capital markets segment generates income from trading activities, including commissions and spreads on buying and selling securities in the equity and fixed income markets. Additionally, Jefferies' merchant banking activities involve investing in and managing a portfolio of companies and assets, which can provide returns through dividends, interest, and capital appreciation. Strategic partnerships and a diversified client base contribute significantly to Jefferies' earnings, allowing the company to leverage its market expertise and global reach.

Jefferies Financial Statement Overview

Summary

Jefferies demonstrates strong profitability and operational efficiency, with high margins indicating effective cost management. However, the company faces challenges with declining revenue growth and negative cash flow metrics, signaling potential financial risks. The low reliance on debt is a positive aspect, but improving cash flow management is crucial for long-term growth.

Income Statement

Jefferies shows a solid gross profit margin of 59.40% and a net profit margin of 6.87% for TTM, indicating strong operational efficiency and profitability. The EBIT margin of 35.07% and EBITDA margin of 45.06% further emphasize effective cost management. However, the revenue growth rate shows a decline of 2.03% from the previous year, which could be a concern for future growth prospects.

Balance Sheet

The debt-to-equity ratio stands at a low 0.11, reflecting limited financial leverage and reduced default risk. The return on equity (ROE) for TTM is 6.93%, showing moderate profitability relative to equity. The equity ratio is 14.53%, suggesting that Jefferies is not overly reliant on equity financing. However, the relatively low equity ratio may indicate some risk in financial stability.

Cash Flow

Jefferies experienced a negative free cash flow in TTM, with a significant decline from the previous year. The operating cash flow to net income ratio is negative, indicating cash outflows exceeded income, which raises concerns about operational efficiency. On a positive note, the free cash flow to net income ratio is also negative, emphasizing the need for improved cash management.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	10.52B	7.23B	7.53B	9.46B	6.90B
Gross Profit	6.22B	6.66B	6.51B	8.40B	6.13B
EBITDA	4.68B	3.10B	2.42B	3.37B	2.17B
Net Income	743.38M	277.69M	785.45M	1.67B	775.24M
Balance Sheet
Total Assets	64.36B	57.91B	51.06B	56.11B	53.12B
Cash, Cash Equivalents and Short-Term Investments	12.15B	8.53B	9.70B	10.76B	9.06B
Total Debt	20.36B	16.09B	13.72B	11.42B	19.83B
Total Liabilities	54.13B	48.10B	40.63B	45.38B	43.53B
Stockholders Equity	10.16B	9.71B	10.36B	10.68B	9.53B
Cash Flow
Free Cash Flow	-459.84M	-1.93B	1.58B	1.42B	2.05B
Operating Cash Flow	-209.25M	-1.93B	1.80B	1.58B	2.22B
Investing Cash Flow	210.31M	-12.20M	-60.54M	-409.87M	-186.19M
Financing Cash Flow	3.35B	1.06B	-2.84B	994.29M	-723.52M

Jefferies Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 58.36
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JEF, the sentiment is Positive. The current price of 58.36 is above the 20-day moving average (MA) of 56.11, above the 50-day MA of 53.58, and below the 200-day MA of 61.86, indicating a neutral trend. The MACD of 1.08 indicates Negative momentum. The RSI at 65.60 is Neutral, neither overbought nor oversold. The STOCH value of 94.80 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JEF.

Jefferies Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HLI	77 Outperform	$13.57B	33.13	19.93%	1.20%	24.88%	39.55%
PJT	76 Outperform	$6.38B	32.12	96.33%	0.56%	18.40%	54.77%
EVR	76 Outperform	$11.70B	28.97	29.73%	1.07%	26.88%	68.65%
SF	75 Outperform	$11.48B	21.29	11.48%	1.60%	12.85%	20.21%
PIPR	70 Neutral	$5.58B	27.46	17.59%	1.78%	10.27%	88.77%
Sector *	68 Neutral	$17.09B	11.25	9.70%	3.80%	11.17%	-4.03%
JEF	68 Neutral	$11.87B	21.80	5.75%	2.57%	1.00%	46.98%

Jefferies Corporate Events

Jefferies Reports Record Growth and Financial Health

Jefferies begins 2025 in its strongest position ever, driven by its talented team and unique culture, which has led to broad global growth and an enhanced market position. In 2024, the firm achieved $7 billion in net revenues and increased its quarterly dividend by 14.3%, reflecting significant progress in its M&A pipeline, IPO backlog, and trading volumes. The company has returned $6.4 billion to shareholders over seven years and had its credit ratings upgraded, indicating robust financial health and stakeholder alignment.