Analyst sums up Jefferies as a decent result in an overall messy quarter as the company kicks off earnings season for Wall Street banks
Jefferies Financial Group Inc. stock outpaced gains in the broad market on Tuesday after the bank matched analyst earnings estimates and beat on revenue on strength in its merchant banking unit.
Jefferies JEF said after the closing bell on Monday its fourth-quarter earnings totaled 57 cents a share, in line with analyst estimates according to data compiled by FactSet.Shares of Jefferies rose 4.1% on Tuesday, outpacing the 0.5% gain by the Financial Select Sector SPDR ETF XLF and the 0.5% rise by the S&P 500 SPX . The stock is now down 3.1% in the past 12 months against a 16.2% loss by the S&P 500 during the same time period.
During the quarter, the Merchant Banking unit of Jefferies also booked revenue from the sale of a multi-family project at its HomeFed unit. Challenges in the quarter included a higher compensation ratio, lower-than-expected buybacks, and weak business trends which collectively “make it difficult to be constructive on the shares at the current valuation,” Brown said.
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