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Jefferies (JEF) Up 8.4% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Jefferies (JEF - Free Report) . Shares have added about 8.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Jefferies due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Jefferies Financial’s Q1 Earnings Lag Estimates, Costs Decline
Jefferies Financial’s earnings per share for the three-month period ended Feb 28, 2019 came in at 14 cents, lagging the Zacks Consensus Estimate of 24 cents. The reported figure compares unfavorably with earnings of 34 cents per share reported during the three-month period ended Mar 31, 2018.
The company’s results were hurt by a decline in revenues, given Government shutdown for five weeks and dismal equity markets performance. Nevertheless, lower expenses were a positive. The Merchant Banking segment’s performance was decent.
Net income attributable to shareholders for the first quarter of 2019 came in at $44.8 million, down 64% year over year.
Revenues & Expenses Decline
Net revenues for the reported quarter were $828.4 million, down 7.5% year over year.
Total expenses were $806.4 million, down 9.4% year over year. This decline was mainly due to a fall in compensation and benefits costs, and cost of sales.
Quarterly Segment Performance
Jefferies Group: This segment reported net revenues of $685.7 million, down 16.5% year over year. Expenses came in at $623.1 million, slipping 10.8% year over year.
Merchant Banking: Net revenues came in at $136.3 million, surging 84.5% year over year. Expenses were $143.5 million, down 7.5% year over year.
Corporate: This segment reported net revenues of $4.2 million, up 36.7% year over year. Expenses came in at $25.5 million, up 3.8% year over year.
Share Repurchases
During the reported quarter, the company repurchased 9.6 million shares for $195 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 9.09% due to these changes.
VGM Scores
Currently, Jefferies has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile 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 this revision looks promising. Notably, Jefferies has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Jefferies (JEF) Up 8.4% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Jefferies (JEF - Free Report) . Shares have added about 8.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Jefferies due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Jefferies Financial’s Q1 Earnings Lag Estimates, Costs Decline
Jefferies Financial’s earnings per share for the three-month period ended Feb 28, 2019 came in at 14 cents, lagging the Zacks Consensus Estimate of 24 cents. The reported figure compares unfavorably with earnings of 34 cents per share reported during the three-month period ended Mar 31, 2018.
The company’s results were hurt by a decline in revenues, given Government shutdown for five weeks and dismal equity markets performance. Nevertheless, lower expenses were a positive. The Merchant Banking segment’s performance was decent.
Net income attributable to shareholders for the first quarter of 2019 came in at $44.8 million, down 64% year over year.
Revenues & Expenses Decline
Net revenues for the reported quarter were $828.4 million, down 7.5% year over year.
Total expenses were $806.4 million, down 9.4% year over year. This decline was mainly due to a fall in compensation and benefits costs, and cost of sales.
Quarterly Segment Performance
Jefferies Group: This segment reported net revenues of $685.7 million, down 16.5% year over year. Expenses came in at $623.1 million, slipping 10.8% year over year.
Merchant Banking: Net revenues came in at $136.3 million, surging 84.5% year over year. Expenses were $143.5 million, down 7.5% year over year.
Corporate: This segment reported net revenues of $4.2 million, up 36.7% year over year. Expenses came in at $25.5 million, up 3.8% year over year.
Share Repurchases
During the reported quarter, the company repurchased 9.6 million shares for $195 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 9.09% due to these changes.
VGM Scores
Currently, Jefferies has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile 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 this revision looks promising. Notably, Jefferies has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.