Jefferies Financial Group’s JEF second-quarter fiscal 2026 (ended May 31) adjusted earnings per share from continuing operations of $1.03 missed the Zacks Consensus Estimate of $1.09. However, the bottom line increased significantly from the prior-year quarter.
Results were primarily aided by record investment banking advisory and underwriting net revenues, as well as record equities net revenues. However, a rise in expenses hurt the results to an extent.
Net earnings attributable to common shareholders (GAAP) increased year over year significantly from $88 million to $226.2 million.
Jefferies’ Revenues Improve, Expenses Rise
Quarterly net revenues were $2.21 billion, up 35% from the prior-year quarter. The top line marginally missed the Zacks Consensus Estimate of $2.22 billion.
Total non-interest expenses were $1.89 billion, up 26.1% from the year-ago quarter. The rise was due to an increase in almost all cost components, except for depreciation and amortization costs, cost of sales, and other expenses.
As of May 31, 2026, book value per common share was $51.95, up from $49.96 as of May 31, 2025. Furthermore, adjusted tangible book value per fully diluted share increased from $32.84 to $34.55.
JEF’s Balance Sheet Solid
As of May 31, 2026, total assets were $79.54 billion, up from $74.38 billion as of Feb. 28, 2026, while total shareholders’ equity was $10.57 billion, down modestly from $10.61 billion.
The leverage ratio was 7.5 compared with 6.5 in the prior-year quarter, and the tangible gross leverage ratio was 9.0 compared with 7.9.
Return on adjusted tangible shareholders’ equity was 12.8%, up from 5.5% in the prior-year quarter.
JEF’s Quarterly Segment Performance
Investment Banking & Capital Markets: Total Net revenues were $2.01 billion, rising 36.4% from the prior-year quarter. Investment Banking net revenues were $1.21 billion, up 57.5% year over year, driven by higher advisory and equity underwriting revenues, while debt underwriting remained solid but was lower year over year. Capital Markets net revenues were $799.3 million, up 13.5%, driven by increases in both Equities and Fixed Income net revenues.
Asset Management: Net revenues were $187.7 million, up 21.4% from the year-ago quarter. Asset management fees and revenues, as well as investment return, declined year over year, but other investments, inclusive of net interest, increased.
JEF’s Share Repurchase Update
In the reported quarter, Jefferies repurchased 4 million common shares for $197 million, at an average price of $49.83 per share.
Its board also increased the share buyback authorization back to $250 million.
Our Take on Jefferies
Investment banking share gains, global partnerships, a strong balance sheet position and active capital distribution activities are expected to keep supporting Jefferies’ earnings through cycles. However, mounting costs (due to higher compensation and digital upgrades) and episodic credit losses might weigh on profitability.
Jefferies Financial Group Inc. Price, Consensus and EPS Surprise
Jefferies Financial Group Inc. price-consensus-eps-surprise-chart | Jefferies Financial Group Inc. Quote
At present, Jefferies carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Dates of JEF’s Peers
JPMorgan JPM is scheduled to report second-quarter 2026 results on July 14.
Over the past 30 days, the Zacks Consensus Estimate for JPMorgan’s quarterly earnings has been revised upward to $5.44. The estimated figure indicates 9.7% growth from the prior-year quarter.
Bank of America BAC is also slated to announce second-quarter 2026 results on July 14.
Over the past 30 days, the Zacks Consensus Estimate for BAC’s quarterly earnings has been revised lower to $1.09. This implies a 22.5% rise from the prior-year quarter.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
