It has been about a month since the last earnings report for Jefferies (JEF). Shares have lost about 15.2% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Jefferies due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important drivers.
Jefferies Q3 Earnings Beat Estimates on Solid IB & Capital Markets
Jefferies’ third-quarter fiscal 2025 (ended Aug. 31) adjusted earnings of $1.05 per share handily surpassed the Zacks Consensus Estimate of 79 cents. The bottom line compared favorably with the prior-year quarter’s earnings of 78 cents per share.
Higher capital markets revenues and solid performances in the IB and asset management businesses aided results. However, higher expenses remained a spoilsport.
Net income attributable to common shareholders (GAAP basis) was $224 million, up from $167.1 million in the prior-year quarter.
Revenues Rise, Expenses Increase
Quarterly net revenues were $2.05 billion, up 21.6% year over year. The top line surpassed the Zacks Consensus Estimate of $1.89 billion.
Total non-interest expenses were $1.72 billion, up 19.9% from the prior-year quarter. The rise was due to an increase in almost all cost components except the cost of sales.
As of Aug. 31, 2025, book value per common share was $50.60, up from $48.89 as of Aug. 31, 2024. Furthermore, the adjusted tangible book value per fully diluted share increased from $31.87 to $33.38.
Quarterly Segment Performance
Investment Banking and Capital Markets: Net revenues were $1.86 billion, rising 14.7% from the prior-year quarter. The growth was driven by higher advisory revenues, equity and debt underwriting alongside robust equity and fixed-income performance.
Asset Management: Net revenues were $176.9 million, a significant jump from $59 million in the year-ago quarter.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a upward trend in fresh estimates.
The consensus estimate has shifted 25.5% due to these changes.
VGM Scores
At this time, Jefferies has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Charting a somewhat similar path, the stock was allocated a score of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Jefferies has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Jefferies Financial Group Inc. (JEF): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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