Jefferies Financial Group Inc. Just Missed Earnings

Shareholders might have noticed that Jefferies Financial Group Inc. (NYSE:JEF) filed its first-quarter result this time last week. The early response was not positive, with shares down 2.7% to US$44.10 in the past week. Results were mixed, with revenues of US$1.7b exceeding expectations, even as earnings per share (EPS) came up short. Statutory earnings were US$0.66 per share, -12% below whatthe analysts had forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there’s been a strong change in the company’s prospects, or if it’s business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Jefferies Financial Group

After the latest results, the three analysts covering Jefferies Financial Group are now predicting revenues of US$6.69b in 2024. If met, this would reflect a sizeable 30% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 99% to US$2.67. In the lead-up to this report, the analysts had been modelling revenues of US$6.35b and earnings per share (EPS) of US$3.35 in 2024. While next year’s revenue estimates increased, there was also a pretty serious reduction to EPS expectations, suggesting the consensus has a bit of a mixed view of these results.

The consensus price target was unchanged at US$49.00, suggesting the business is performing roughly in line with expectations, despite some adjustments to profit and revenue forecasts. That’s not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Jefferies Financial Group at US$52.00 per share, while the most bearish prices it at US$44.00. The narrow spread of estimates could suggest that the business’ future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

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These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Jefferies Financial Group’s past performance and to peers in the same industry. For example, we noticed that Jefferies Financial Group’s rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 42% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 18% a year over the past three years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 6.8% annually. So it looks like Jefferies Financial Group is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at US$49.00, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company’s earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Jefferies Financial Group going out to 2026, and you can see them free on our platform here..

Even so, be aware that Jefferies Financial Group is showing 2 warning signs in our investment analysis , and 1 of those doesn’t sit too well with us…

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.