Jefferies & Company
JEF
$45.03
+0.04%
Jefferies Financial Group is a full-service investment bank and capital markets firm whose core operations span advisory (M&A and restructuring), equity and debt underwriting, equities and fixed income sales and trading, and prime brokerage, complemented by a smaller asset management and legacy merchant banking portfolio. The firm is best characterized as the preeminent independent, mid-market-focused investment bank, having methodically taken share from bulge-bracket universal banks over the past decade by combining boutique-style advisory relationships with a full trading platform and a growing European and Asian footprint. The current investor debate centers on whether Jefferies is the cleanest pure-play expression of a Wall Street investment banking recovery — recent coverage highlights that IB gains are concentrated among advisory-heavy firms like Jefferies while universal banks lag — set against a stock that has nonetheless de-rated sharply as the market questions the durability of the dealmaking rebound and digests a lumpy quarterly revenue mix. With roughly 7,400 employees, a market capitalization near $12 billion, and a dividend yielding over 3%, the narrative has shifted from growth-scarcity premium toward cyclical value, with investors weighing compensation leverage, capital markets volatility, and the firm's ability to convert a recovering backlog into consistent earnings.…
JEF
Jefferies & Company
$45.03
Related headlines
Investment Opinion: Should I buy JEF Today?
Rating: Hold. Jefferies is a high-quality independent investment bank trading at a deep cyclical discount, but the lack of a clear earnings catalyst and persistent technical weakness warrant a cautious stance. The analyst consensus target of $55.67 implies 24% upside, but the recommendation field is 'none' (skewed to Hold), reflecting balanced risk/reward.
The valuation is compelling on forward metrics: a forward PE of 9.9x on consensus EPS of $5.00 and a price-to-book of 1.16x, well below the historical 1.34-1.67x range. However, trailing profitability is weak with a net margin of 6.6% and ROE of 6.7%, and revenue declined 23.6% YoY in Q3 2026. The dividend yield of 3.05% provides some support, but free cash flow volatility and high leverage (debt-to-equity of 2.25x) are concerns. The stock's 29.4% YTD decline and 41.3-point relative underperformance versus the S&P 500 suggest the market is pricing in a bleak scenario.
The biggest risks are a continued downturn in capital markets activity, failure to achieve the $5.00 EPS estimate, and a breakdown below the 52-week low of $35.53. The rating would upgrade to Buy if the stock stabilizes above $52-53 (August consolidation shelf) and forward estimates are revised upward, or if price-to-book falls below 1.0x. It would downgrade to Sell if revenue growth remains negative for another quarter or if the dividend is cut. Relative to its own history and peers, the stock appears undervalued on a forward basis, but the market is demanding evidence of a durable recovery.
Sign up to view all
JEF 12-Month Price Forecast
Jefferies presents a classic cyclical value opportunity with significant uncertainty. The stock's deep discount on forward earnings and book value suggests the market has priced in a severe downturn, but the timing of a recovery is unclear. The technical downtrend and relative underperformance indicate persistent selling pressure, while the fundamental story hinges on the conversion of the investment banking backlog. We would upgrade to bullish if the stock stabilizes above $52-53 and forward estimates are revised upward, or if price-to-book falls below 1.0x. We would downgrade to bearish if revenue growth remains negative for another quarter or if the dividend is cut. Given the balanced risk/reward, a neutral stance with a medium confidence is appropriate.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Jefferies & Company's 12-month outlook, with a consensus price target around $55.17 and implied upside of +22.5% versus the current price.
Average Target
$55.17
0 analysts
Implied Upside
+22.5%
vs. current price
Analyst Count
—
covering this stock
Price Range
$47 - $71
Analyst target range
Six analysts cover Jefferies with a consensus average target price of $55.67, implying roughly 24% upside from the current $44.80 — a bullish signal in absolute terms, though the recommendation field is reported as "none," meaning the distribution skews toward Hold/Equal Weight rather than a clean Buy consensus. The institutional ratings history confirms this: Oppenheimer and Goldman Sachs maintain Outperform/Buy, while Morgan Stanley (Equal Weight), BMO Capital (Market Perform), and UBS (Neutral) sit on the sidelines, and UBS notably downgraded from Buy to Neutral on June 18, 2026 — a telling shift that preceded the June collapse. The consensus is therefore best characterized as cautiously constructive but not conviction-bullish, with the average target reflecting the buy-side analysts' view rather than a unified Street. The target range of $47.00 to $71.00 is wide — a 51% spread from low to high — signaling genuine disagreement about the earnings trajectory. The high target of $71.00 implies roughly 58% upside and would require the forward EPS estimate of $5.00 to be achieved with multiple expansion back toward 1.5x book, effectively a full investment banking recovery plus re-rating. The low target of $47.00 sits just 5% above the current price and prices in continued margin compression, weak capital markets volumes, and a book value that fails to compound — essentially a "no recovery" scenario. The clustering of reiterated ratings on September 29, 2026 (Oppenheimer, Goldman, Morgan Stanley, BMO) with no upgrades suggests analysts are waiting for evidence of a durable IB rebound before changing their stance, and the wide spread combined with the recent UBS downgrade argues for treating the consensus target as an aspirational ceiling rather than a near-term price objective.
Bulls vs Bears: JEF Investment Factors
The bear case currently has stronger evidence: the stock is in a severe downtrend, revenue is contracting, and profitability is thin and volatile. However, the bull case rests on a compelling valuation disconnect—a forward PE of 9.9x and price-to-book of 1.16x suggest the market is pricing in a deep cyclical trough. The single most important tension is whether the investment banking recovery will translate into sustained earnings growth; if forward EPS of $5.00 is achieved, the stock is significantly undervalued, but if estimates slip, the trailing multiple offers little support. Near-term momentum and relative strength argue for caution, but the risk/reward for long-term investors is becoming asymmetric.
Bullish
- Deep cyclical discount on forward earnings: Forward PE of 9.9x on consensus EPS of $5.00 versus trailing PE of 19.4x implies the market is pricing in a doubling of earnings. If the IB recovery materializes, the stock is exceptionally cheap.
- Analyst targets imply 24% upside: Six analysts have an average target of $55.67, 24% above the current $44.80, with a high target of $71.00 (58% upside). The consensus is cautiously constructive despite the stock's downtrend.
- Book value discount to historical range: Price-to-book of 1.16x is a 13-30% discount to the 1.34x-1.67x range seen in 2024-2025, suggesting the market has de-rated the franchise well below its recent norm.
- Strong liquidity and cash position: Cash on hand of $15.45 billion and a current ratio of 2.43 provide ample liquidity to navigate cyclical downturns and fund growth initiatives.
Bearish
- Severe relative underperformance: The stock is down 29.4% YTD versus the S&P 500's +11.9% gain, a 41.3-point relative strength gap. Over three months, it has underperformed by 21.0 points, indicating persistent distribution.
- Revenue contraction and lumpy earnings: Q3 2026 revenue fell 23.6% YoY to $2.22 billion, and the sequential drop from Q2's $3.41 billion highlights extreme volatility. TTM net margin is only 6.6%, and Q4 2025 had negative EBITDA of -$1.44 billion.
- High leverage and low profitability: Debt-to-equity of 2.25x and ROE of just 6.7% reflect a highly levered, low-return business model. ROA of 1.2% is thin, and free cash flow is volatile, swinging from -$1.80 billion in Q1 to +$1.55 billion in Q2.
- Technical downtrend with overhead supply: The stock is in a clear downtrend, down 18.4% over three months and 5.4% over the past month, with lower highs since June. The 52-week low of $35.53 is 21% below current levels, and a breakdown could trigger further selling.
JEF Technical Analysis
Jefferies is in a clear, sustained downtrend across every measurable horizon: the stock is down 8.2% over one year, 18.4% over three months, and 29.4% year-to-date, with a maximum drawdown of -48.8% from prior peaks. At $44.80, the shares sit at roughly 30% of the 52-week range of $35.53 to $66.60 — closer to the floor than the ceiling — which in a falling-knife pattern signals persistent distribution rather than a value entry until price action stabilizes. The 52-week high of $66.60 was set during the June rally, and the failure to hold that breakout has left a heavy overhead supply zone. Recent momentum is unambiguously negative and decelerating: the stock is down 5.4% over the past month versus a +1.2% gain for the S&P 500 (relative strength of -6.6 points), and down 18.4% over three months against +2.7% for the index (-21.0 points of relative strength). The June collapse from $62.81 on June 22 to $49.10 by June 26 — a roughly 22% drawdown in four sessions — marked a momentum break from which the stock has never recovered, and the subsequent July rebound to $57.13 failed at lower highs, confirming a downtrend of lower highs and lower lows. The 1-month decline of 5.4% versus the 1-year decline of 8.2% shows the selling is not exhausting but rather re-accelerating into the autumn, with the stock printing fresh relative lows in October. Key support rests at the 52-week low of $35.53, roughly 21% below the current price; a breakdown there would signal capitulation and likely force another leg of momentum-driven selling. Resistance is layered: the $52-53 area (the August consolidation shelf) must be reclaimed before the $57-58 July highs and ultimately the $66.60 52-week high come into play. With a beta of 1.544, Jefferies is roughly 54% more volatile than the S&P 500, meaning position sizing should be materially smaller than an index-equivalent allocation, and a short ratio of 3.08 days-to-cover indicates moderate but not extreme bearish positioning.
Beta
1.54
1.54x market volatility
Max Drawdown
-48.8%
Largest decline past year
52-Week Range
$36-$67
Price range past year
Annual Return
-18.2%
Cumulative gain past year
| Period | JEF Return | S&P 500 |
|---|---|---|
| 1m | -5.9% | -0.1% |
| 3m | -19.0% | +4.7% |
| 6m | -5.1% | +8.3% |
| 1y | -18.2% | +15.2% |
| ytd | -29.0% | +13.4% |
Bobby - Your AI Investment Partner
Get real-time data, AI-driven personalized investment analysis to make smarter investment decisions
JEF Fundamental Analysis
The revenue trajectory is deteriorating at the headline level but is distorted by the lumpy nature of capital markets activity: fiscal Q3 2026 (quarter ended August 31) revenue of $2.22 billion fell 23.6% year-over-year from $2.91 billion, a sharp deceleration from Q2's $3.41 billion and Q1's $2.87 billion. The sequential collapse from Q2 to Q3 reflects the absence of the outsized principal transactions and trading gains that flattered the May quarter, and the segment mix shows investment banking at $1.21 billion, interest revenue at $854 million, principal transactions at $489 million, and commissions at $401 million — a portfolio heavily levered to capital markets volumes rather than recurring fee streams. The year-over-year decline is a warning that the IB recovery narrative is not yet translating into consistent top-line growth, and the investment case now hinges on whether the advisory backlog converts in fiscal 2027. Profitability remains positive but thin and volatile: Q3 net income was $266.8 million on a 12.0% net margin, with gross margin of 91.3% (a figure inflated by the revenue presentation of a broker-dealer) and an operating margin of 15.8%, while the trailing twelve-month net margin is only 6.6% and operating margin 6.3%. Quarterly EPS of $1.12 (diluted $1.08) compares with $1.06 in Q2 and $0.72 in Q1, but the Q4 2025 quarter showed a negative EBITDA of -$1.44 billion and a -59.0% operating margin, illustrating how compensation and mark-to-market swings can whipsaw results. The balance sheet is highly levered, as is typical for the industry: debt-to-equity stands at 2.25x, the current ratio is 2.43, and ROE is a modest 6.7% with ROA of just 1.2%. Free cash flow is strong on a trailing basis at $1.78 billion, but it is extremely volatile quarter-to-quarter — Q1 2026 saw -$1.80 billion of FCF on working capital swings before Q2 rebounded to +$1.55 billion — and the negative price-to-cash-flow ratio of -8.17 reflects the mismatch between market cap and the cash flow timing. Cash on hand of $15.45 billion provides ample liquidity, but the firm's funding model depends on rolling short-term debt, making the 2.25x leverage a structural rather than acute risk.
Quarterly Revenue
$2.2B
2026-08
Revenue YoY Growth
-23.6%
YoY Comparison
Gross Margin
91.3%
Latest Quarter
Free Cash Flow
$1.8B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
Open an Account, get $2 TSLA now!
Valuation Analysis: Is JEF Overvalued?
Because Jefferies is profitable (Q3 net income of $266.8 million, TTM EPS positive), the PE ratio is the appropriate primary metric: the trailing PE of 19.4x against a forward PE of 9.9x implies the market expects earnings to roughly double, a gap that is unusually wide and signals either significant skepticism about the forward estimate or a deep cyclical discount embedded in the current price. The forward PE of 9.9x on consensus EPS of $5.00 versus trailing EPS of roughly $2.31 is a stark divergence that demands scrutiny — if the forward number is achieved, the stock is cheap; if it slips, the trailing multiple is far less forgiving. On price-to-book of 1.16x and price-to-sales of 1.13x, Jefferies trades at a discount to the historical 1.3-1.7x book range it commanded through 2024-2025, consistent with a de-rating of the franchise. Peer comparison within Financial - Capital Markets is constrained by the absence of a clean industry-average dataset, but the internal spread is instructive: the stock's own historical PE has ranged from roughly 11.7x (Q3 2026) to 40.6x (Q3 2023) and 150x during the 2023 earnings trough, so the current 19.4x sits in the middle of a very wide band. The price-to-book of 1.16x versus historical readings of 1.34x (Q3 2025) and 1.67x (Q4 2024) represents a roughly 13-30% discount to its own recent band, suggesting the market is pricing in either book-value erosion or a lower sustainable ROE. Historically, the stock has traded between 0.72x and 1.67x book over the past four years, and at 1.16x it is in the lower-middle of that range — not a distressed valuation, but a clear signal that the market no longer awards the growth premium it did when the shares traded near 1.7x book in late 2024.
PE
19.4x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 7x~31x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
20.5x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks are substantial. Revenue is highly concentrated in capital markets activities, with investment banking at $1.21 billion and principal transactions at $489 million in Q3 2026, making results vulnerable to deal flow and market volatility. The 23.6% YoY revenue decline in Q3 2026 underscores this cyclicality, and the TTM net margin of 6.6% leaves little buffer. Leverage is high at 2.25x debt-to-equity, and free cash flow is extremely volatile, swinging from -$1.80 billion in Q1 2026 to +$1.55 billion in Q2, which complicates capital planning and dividend sustainability. Additionally, the payout ratio of 52.7% may be stretched if earnings decline further.
Market and competitive risks include the stock's high beta of 1.544, meaning it is 54% more volatile than the S&P 500, and its recent relative underperformance of 41.3 points YTD versus the index. Valuation compression is a risk: while the forward PE of 9.9x is low, it relies on optimistic earnings estimates; if the IB recovery stalls, the trailing PE of 19.4x could contract. Competition from bulge-bracket banks and boutique advisory firms is intense, and Jefferies' mid-market focus may limit upside in a flight to quality. Regulatory changes affecting capital markets activity or compensation practices could also pressure margins.
A worst-case scenario would involve a prolonged downturn in capital markets, causing revenue to stagnate and earnings to miss the $5.00 forward EPS estimate. The stock could retest its 52-week low of $35.53, representing a 21% decline from the current $44.80. If book value erodes and the price-to-book multiple compresses to the historical low of 0.72x, the downside could be even greater. Given the max drawdown of -48.8% from prior peaks, a severe recession or financial crisis could lead to a 30-50% loss from current levels. Investors should be prepared for significant volatility.
FAQ
The key risks include: 1) Financial risk: high leverage (debt-to-equity of 2.25x) and volatile free cash flow, with a TTM net margin of only 6.6%. 2) Cyclical risk: revenue is highly dependent on capital markets activity, which declined 23.6% YoY in Q3 2026. 3) Market risk: high beta of 1.544 means the stock is more volatile than the market, and it has underperformed the S&P 500 by 41.3 points YTD. 4) Company-specific risk: the forward EPS estimate of $5.00 may be too optimistic, and a failure to achieve it could lead to further multiple compression. Additionally, the dividend payout ratio of 52.7% could be at risk if earnings decline.
Our 12-month forecast has three scenarios: Bull case (25% probability) targets $66-71, driven by a strong IB recovery and multiple expansion. Base case (50% probability) targets $50-58, assuming modest recovery and stable earnings. Bear case (25% probability) targets $35-47, reflecting a prolonged downturn and earnings miss. The base case is most likely, with the key assumption that forward EPS of $5.00 is partially achieved and the stock gradually recovers toward the analyst average target of $55.67. However, near-term volatility may persist, and the stock could test support at $35.53 before recovering.
JEF appears undervalued on forward metrics. The forward PE of 9.9x is less than half the trailing PE of 19.4x, reflecting expectations of earnings growth. Price-to-book of 1.16x is below the historical range of 1.34-1.67x seen in 2024-2025, and price-to-sales of 1.13x is also low. However, the trailing PE of 19.4x is not cheap relative to the broader market, and the stock's 29.4% YTD decline suggests the market is pricing in a bleak scenario. The valuation implies the market expects earnings to roughly double, but skepticism remains high. If the forward EPS of $5.00 is achieved, the stock is significantly undervalued; if not, it could be fairly valued or even overvalued.
From a risk/reward perspective, JEF offers a compelling but uncertain opportunity. The stock trades at a forward PE of 9.9x and price-to-book of 1.16x, well below historical norms, implying significant upside if earnings recover. Analyst targets average $55.67, suggesting 24% upside. However, the stock is in a severe downtrend, down 29.4% YTD, and revenue declined 23.6% YoY in Q3 2026. The biggest downside risk is a retest of the 52-week low of $35.53, a 21% decline. For long-term investors with a high risk tolerance, the valuation is attractive, but near-term volatility is likely. It is not a good buy for risk-averse investors or those seeking stable income.
JEF is more suitable for long-term investment (minimum 2-3 years) given its cyclical nature and current downtrend. The stock's high beta (1.544) and volatile earnings make it unsuitable for short-term trading unless one has a high risk tolerance and active management. The dividend yield of 3.05% provides some income while waiting for a recovery, but the payout ratio of 52.7% may limit dividend growth. Earnings visibility is low due to the lumpiness of capital markets revenues. Long-term investors can benefit from the cyclical recovery, but they should be prepared for significant drawdowns, as evidenced by the max drawdown of -48.8%. A dollar-cost averaging strategy could mitigate timing risk.