2Q Revenue and Exp Miss, As Expectations Were Too Stretched

Research evidence excerpt

2Q Revenue and Exp Miss, As Expectations Were Too Stretched

Jefferies Financial - Block Summary Model

Income Statement 2024A 2025A 2026E 2027E

Total Net Revenue $7,035 $7,344 $8,506 $8,772

Compensation Expense 3,660 3,860 4,486 4,494 Valuation

Adj. Operating Income $1,006 $871 $1,172 $1,319 Our target price of $60 is determined using P/E multiple of

roughly 14.5x on our 2027 EPS estimate. Net Income 668 608 816 909

Core EPS $2.99 $2.73 $3.70 $4.15 Upside Scenario $70.00

Diluted Shares Outstanding 224 223 221 219 Assuming institutional securities gets a greater-than-

expected uplift from capital markets and trades at an 16%

Balance Sheet 2024A 2025A 2026E 2027E premium to our target P/E of roughly 14.5x.

Cash & Equivalents 12,153 14,044 16,370 17,035

Downside Scenario $45.00 Investments 39,103 46,164 53,358 55,525

Assuming institutional securities gets a worse-than-

Total Assets 64,360 76,012 90,958 94,651 expected impact from capital markets and trades at a 25%

Long-Term Debt 13,531 15,896 17,229 17,229 discount to our target P/E of roughly 14.5x.

in USD

Total Liabilities 54,135 65,370 80,291 83,344

Total Equity 10,225 10,642 10,667 11,307 -22% +4% +21%

Key Metrics 2024A 2025A 2026E 2027E

Downside Current Target Upside

Dividend ($/sh) $1.35 $1.60 $1.69 $1.95 Scenario Price Price Scenario

45.00 57.94 60.00 70.00 Adj. Compensation Ratio 52.0% 52.6% 52.7% 51.2%

Adj. Operating Margin 14.3% 11.9% 13.8% 15.0% Key Catalysts

ROTCE 10.2% 9.3% 10.7% 10.5% Earnings, regulatory changes, capital markets rebound,

equity market strength.Source: BMO Capital Markets, Company Reports

Company Description

Jefferies Financial Group is a diversified financial services

firm operating through Investment Banking & Capital

Markets and Asset Management. It provides underwriting