Jefferies' Q1 revenue misses estimates; takes hit from MFS, First Brand

Overview

• U.S. investment bank's Q1 revenue rose 27% yr/yr but missed analyst expectations

• Diluted EPS from continuing operations grew to $0.70 from $0.57 yr/yr

• Jefferies had $17 million in losses related to collapsed British lender Market Financial Solutions and bankrupt First Brands after adjusting for compensation and taxes

• Company repurchased 3 mln shares for $174 mln and raised buyback authorization to $250 mln

Outlook

• Company says core business momentum from late 2025 has continued into Q2 2026

• Jefferies expects results to increasingly reflect core business as legacy portfolio winds down

• Company aims to build on current momentum throughout fiscal 2026 and beyond

Result Drivers

• EQUITIES MOMENTUM - Equities net revenues rose 37% on higher global trading volumes and strength in options, derivatives, and electronic trading, per management

• ASSET MANAGEMENT RETURNS - Investment return increased significantly from the prior year quarter due to improved performance across several fund strategies, particularly those with a long equity bias

Company press release: ID:nBw1NwtqCa

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 4 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the investment banking & brokerage services peer group is "buy"

• Wall Street's median 12-month price target for Jefferies Financial Group Inc is $54.00, about 33.2% above its March 24 closing price of $40.55

• The stock recently traded at 9 times the next 12-month earnings vs. a P/E of 15 three months ago

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