We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Jefferies (JEF) Soars to 52-Week High, Time to Cash Out?
Read MoreHide Full Article
Have you been paying attention to shares of Jefferies Financial Group (JEF - Free Report) ? Shares have been on the move with the stock up 20.6% over the past month. The stock hit a new 52-week high of $34.29 in the previous session. Jefferies Financial Group has gained 39.4% since the start of the year compared to the 12.5% move for the Zacks Finance sector and the 11.1% return for the Zacks Financial - Miscellaneous Services industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on January 4, 2021, Jefferies reported EPS of $1.11 versus consensus estimate of $0.14 while it beat the consensus revenue estimate by 82.84%.
For the current fiscal year, Jefferies is expected to post earnings of $2.57 per share on $5.36 billion in revenues. This represents a -3.02% change in EPS on a -12.22% change in revenues. For the next fiscal year, the company is expected to earn $2.42 per share on $5.07 billion in revenues. This represents a year-over-year change of -5.84% and -5.36%, respectively.
Valuation Metrics
Jefferies may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Jefferies has a Value Score of A. The stock's Growth and Momentum Scores are B and F, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 13.3X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 9.5X versus its peer group's average of 9.4X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Jefferies currently has a Zacks Rank of #1 (Strong Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Jefferies passes the test. Thus, it seems as though Jefferies shares could have a bit more room to run in the near term.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Jefferies (JEF) Soars to 52-Week High, Time to Cash Out?
Have you been paying attention to shares of Jefferies Financial Group (JEF - Free Report) ? Shares have been on the move with the stock up 20.6% over the past month. The stock hit a new 52-week high of $34.29 in the previous session. Jefferies Financial Group has gained 39.4% since the start of the year compared to the 12.5% move for the Zacks Finance sector and the 11.1% return for the Zacks Financial - Miscellaneous Services industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on January 4, 2021, Jefferies reported EPS of $1.11 versus consensus estimate of $0.14 while it beat the consensus revenue estimate by 82.84%.
For the current fiscal year, Jefferies is expected to post earnings of $2.57 per share on $5.36 billion in revenues. This represents a -3.02% change in EPS on a -12.22% change in revenues. For the next fiscal year, the company is expected to earn $2.42 per share on $5.07 billion in revenues. This represents a year-over-year change of -5.84% and -5.36%, respectively.
Valuation Metrics
Jefferies may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Jefferies has a Value Score of A. The stock's Growth and Momentum Scores are B and F, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 13.3X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 9.5X versus its peer group's average of 9.4X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Jefferies currently has a Zacks Rank of #1 (Strong Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Jefferies passes the test. Thus, it seems as though Jefferies shares could have a bit more room to run in the near term.