Jefferies (JEF) AI Stock Analysis

• Market Cap: $11.52B
• Dividend Yield: 2.86%
• Average Volume (3M): 1.98M
• Price to Earnings (P/E): 21.2
• Beta (1Y): 1.49
• Revenue Growth: 1.00%
• EPS Growth: 46.98%
• Country: US
• Employees: 7,701
• Sector: Financial
• Sector Strength: 81
• Industry: Financial - Capital Markets
• EPS (TTM): 0.40
• Shares Outstanding: 206,280,230
• 10 Day Avg. Volume: 1,517,040
• 30 Day Avg. Volume: 1,984,452
• PEG Ratio: -0.45
• Price to Book (P/B): 1.15
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -6.43
• Enterprise Value/Market Cap: <0.01
• Enterprise Value/Revenue: <0.01
• Enterprise Value/Gross Profit: <0.01
• Enterprise Value/Ebitda: <0.01
• 1Y Price Target: $57.00
• Price Target Upside: 4.00% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 67 Neutral
• Price Target: $55.00 ▲(0.35%Upside)

Jefferies' stock score is driven by strong profitability and operational efficiency, though tempered by declining revenue growth and negative cash flow metrics. The technical analysis indicates moderate momentum, while a fair valuation and attractive dividend yield offer some appeal. The lack of earnings call data and corporate events does not influence the score.

Positive Factors

Investment Banking Activity

Management commentary likely acknowledges improving deal conditions and a reaffirmation of the firm's long-term growth strategy, as evidenced by recent hiring.

Trading Performance

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

Valuation

JEF trades at a lower price-to-earnings ratio compared to its investment banking peers, suggesting that its current valuation might be attractive.

Negative Factors

Earnings Performance

JEF reported 1Q25 EPS of 57¢, which was below consensus estimates due to 15% lower revenue and a 7.1 percentage point lower pre-tax margin.

Fixed Income Performance

Weak Fixed Income, Currencies, and Commodities trading decreased by 37% year-over-year and Equity Capital Markets fell by 51% year-over-year.

Macroeconomic and Geopolitical Uncertainty

The capital markets have become increasingly more challenging due to the uncertainties that have arisen around U.S. policy and geopolitical events.

Jefferies Business Overview & Revenue Model

Company Description

Jefferies Financial Group Inc. engages in the investment banking and capital markets, and asset management businesses in the Americas, Europe, the Middle East, Africa, and Asia. The company operates in Investment Banking and Capital Markets, Asset Management, Merchant Banking, and Corporate segments. It provides investment banking, advisory services with respect to mergers or acquisitions, restructurings or recapitalizations and private capital advisory transactions; equity and debt underwriting; and corporate lending. In addition, the company offers financing, securities lending, and other prime brokerage services; equities research and finance; and wealth management services. Further, it provides clients with sales and trading of investment grade corporate bonds, U.S. and European government and agency securities, municipal bonds, mortgage-backed and asset-backed securities, leveraged loans, consumer loans, high yield and distressed securities, emerging markets debt, interest rate, and credit derivative products, as well as foreign exchange trade execution and securitization; and manages, invests in, and provides services to a diverse group of alternative asset management platforms across a spectrum of investment strategies and asset classes. The company was formerly known as Leucadia National Corporation and changed its name to Jefferies Financial Group Inc. in May 2018. Jefferies Financial Group Inc. was founded in 1962 and is headquartered in New York, New York.

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	7.44B	7.15B	8.19B	6.01B
Gross Profit	6.22B	4.03B	2.60B	3.86B	2.38B
EBITDA	4.68B	3.21B	2.39B	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	9.40B
Cash Flow
Free Cash Flow	-459.84M	-1.93B	1.58B	1.42B	1.90B
Operating Cash Flow	-209.25M	-1.93B	1.80B	1.58B	2.06B
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: Neutral
• Last Price: 54.81
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JEF, the sentiment is Neutral. The current price of 54.81 is below the 20-day moving average (MA) of 54.98, above the 50-day MA of 52.39, and below the 200-day MA of 62.08, indicating a neutral trend. The MACD of 0.90 indicates Positive momentum. The RSI at 52.78 is Neutral, neither overbought nor oversold. The STOCH value of 29.21 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JEF.

Jefferies Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HLI	77 Outperform	$13.59B	33.43	19.93%	1.23%	24.88%	39.55%
EVR	73 Outperform	$11.31B	28.03	29.73%	1.15%	26.88%	68.65%
SF	73 Outperform	$11.11B	20.62	11.48%	1.67%	12.85%	20.21%
PJT	70 Outperform	$6.30B	31.73	96.33%	0.55%	16.04%	60.32%
PIPR	70 Neutral	$5.37B	26.42	17.59%	0.85%	10.27%	88.77%
JEF	67 Neutral	$11.52B	21.17	5.75%	2.86%	1.00%	46.98%
Sector *	67 Neutral	$16.86B	11.82	9.77%	3.72%	12.02%	-8.27%

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.