Jefferies Financial Group Inc. (NYSE: JEF) has confirmed it will release its Q4 2021 earnings results on Monday, January 3, 2021.
What to look for
Earnings: Stockearning’s Estimated EPS for the quarter under review is expected to be more than $1.51 per share reported in the third quarter, based on the trend of recent quarters. In the third quarter, the company beat EPS estimates of $1.02 per share with an EPS surprise of 48.04%. Historical EPS performance shows that in the past 12 quarters, the company has beat estimates nine times (75%) and missed thrice (25%).
Revenue: In the third quarter, the company reported net revenue of $1.65 billion, representing a 19% Yoy increase. For the nine months ending August 31, 2021, the company nad net revenue fo 45.4 billion up 50% YoY.
Stock movement: Jefferies Financial Group shares have been UP nine times out of the past 15 quarters following earnings releases. So, the historical price reaction suggests a 60% probability of the share price going UP once the company reports its fiscal Q4 2021 earnings. According to the Stockearning algorithm, the predicted first-day move is 3%, while the predicted move on the seventh day is 5%.
What analysts are saying
Keefe Bruyette analyst Michael Brown downgraded Jefferies Financial Group from “Buy” to “Hold” but maintained the target price of $46. Brown cites valuation for his downgrade on the stock. The analyst told investors that the financial company is positioned for the current growth in trading and banking, and the bull scenario for monetization from buybacks and merchant banks is intact. Interestingly, the analyst added that the shares had risen 74.4% year to date. Brown contended that with SMFC's stake at or almost its 4.9% target, thus losing technical support, the stock will have a challenging time outdoing peers in the near term.
Morgan Stanley analyst Mana Gosalia commenced coverage on the stock with a “Hold” rating and a price target of 440. Gosalia sees the company well-positioned in the near term by seeing 2022 as a transition year. However, the analyst told investors that the company's trading and investment banking revenue will drop 20% in 2022 with the Federal Reserve taper, market volatility, and rising interest rates, bringing a difficult year.
Goldman Sachs analyst James Yaro commenced coverage on the stock with a Buy rating and a price target of $45, representing an upside of 23%. Yaro initiated coverage in independent investment banks stating that consensus is "overly pessimistic" on the sales trajectory of the group. In a research note, the analyst told investors that the market is yet to discount that Jefferies Financial Group has finalized most of its transition from merchant banks. Additionally, Yaro said that Jefferies is a pure-play, full-service investment firm with low revenue volatility and high returns.
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