Key insights
- Goldman Sachs raised its price target for Jefferies (JEF) to $66, citing accelerated capital markets activity and stronger performance in advisory, underwriting, and equities trading. Jefferies' equity capital markets activity significantly outpaced the industry, and its M&A backlog shows robust growth. This positive outlook on a key financial services firm suggests improving conditions in investment banking, potentially benefiting the broader financial sector and indicating a healthier environment for deal-making.
Investing.com - Goldman Sachs raised its price target on Jefferies Financial Group Inc. (NYSE:JEF) to $66 from $59 while maintaining a Buy rating. The stock currently trades at $55.22, suggesting potential upside. According to InvestingPro analysis, Jefferies appears undervalued based on its Fair Value assessment. The firm increased its second-quarter fiscal 2026 earnings per share estimate by 23% ahead of the company’s results.
Goldman Sachs analyst James Yaro cited accelerated capital markets activity in the quarter, with stronger performance expected across advisory, underwriting and equities trading. The firm modestly lowered its expectations for fixed income, currencies and commodities trading.
Jefferies saw robust underwriting in the quarter based on Dealogic data, with equity capital markets up 200% year-over-year versus 77% for the industry, and debt capital markets up 17% year-over-year versus 10% for the industry. The company’s strong performance is reflected in its 13% revenue growth over the last twelve months, with an $11.28 billion market cap and a P/E ratio of 18.55. Dealogic M&A completions rose 55% year-over-year compared with 5% for the industry. Goldman Sachs forecast Jefferies’ second-quarter fiscal 2026 investment banking revenue up 63% year-over-year and 23% quarter-over-quarter.
Jefferies’ M&A backlog increased 59% year-over-year, compared with a peer average of 35% and the industry at 27%. Industry announcement volumes in May rose 70% year-over-year, though Goldman Sachs expects deal timelines could remain elongated given the macro and geopolitical backdrop.
Goldman Sachs increased its fiscal 2026, 2027 and 2028 earnings per share estimates by 10%, 3% and 2% respectively. The firm forecast a 10.1% return on tangible common equity for the second quarter of fiscal 2026, with expectations of 12.1% and 13.2% for fiscal 2027 and 2028.
In other recent news, Jefferies Financial Group Inc. reported that its shareholders approved an amendment to increase the number of authorized shares of its non-voting common stock. This decision was made at the company’s Annual Meeting of Shareholders, and the Restated Certificate of Incorporation was filed and became effective shortly thereafter. Meanwhile, Jefferies executives have been active in Venezuela, planning visits to gather information about the country’s economic recovery and debt restructuring. In another development, Jefferies is positioning itself to facilitate short-selling trades for SpaceX shares after the company’s upcoming initial public offering, as it was not selected to handle the IPO. Additionally, Jefferies commented on the European Commission’s upcoming "AccelerateEU" energy policy package, which aims to reduce fossil fuel reliance through electrification and support for low-carbon technologies. The firm also released data indicating a 2.3% decrease in the Aya Demand Index for travel registered nurses, despite a 3.9% increase in job openings through Aya Healthcare. These recent developments illustrate Jefferies’ active involvement in various financial and economic sectors.
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