Jefferies Q3 revenue beats estimates on growth in advisory, underwriting fees

Overview

• US investment bank's preliminary Q3 revenue rose 9% yr/yr, beating analyst expectations

• Adjusted EPS not disclosed; net earnings attributable to common shareholders increased yr/yr

• Company repurchased 1.3 mln shares for $70 mln and raised buyback authorization to $250 mln

Outlook

• Jefferies says it is optimistic about the balance of 2026 and momentum heading into 2027

• Company expects higher operating margins and earnings as it completes the sale of Tessellis

• Joint venture with SMBC in Japan expected to begin serving clients in January 2027

Result Drivers

• INVESTMENT BANKING GAINS - Record investment banking net revenues driven by strong advisory and equity underwriting activity, attributed to market share gains and increased market opportunity

• EQUITIES MOMENTUM - Equities net revenues reached a record, supported by higher global trading volumes in cash and electronic trading and expansion of prime services

• FIXED INCOME WEAKNESS - Fixed Income net revenues declined 26% yr/yr due to ongoing lower industry volumes

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", 3 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the investment banking & brokerage services peer group is "buy"

• Wall Street's median 12-month price target for Jefferies Financial Group Inc is $65.00, about 36.3% above its September 25 closing price of $47.68

• The stock recently traded at 11 times the next 12-month earnings vs. a P/E of 13 three months ago

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)