By Davit Kirakosyan and Senad Karaahmetovic
Jefferies Financial Group (NYSE:JEF) shares fell nearly 2% after-hours, following the company's posted 52.5% drop in profit for Q4, citing decreased underwriting fees and volatile markets that affected income from trading desks.
However, the company's investment banking revenue, while down 38% from an off-the-charts 2021, had its second best year and was significantly higher than in 2019.
Q4 EPS was $0.57, in line with the consensus expectations, while revenue of $1.44 billion came in better than the consensus estimate of $1.17B.
The company's Board of Directors declared a quarterly cash dividend of $0.30 per common share, payable on February 24, 2023, to record holders on February 13, 2023.
Goldman Sachs analysts said JEF delivered strong top line numbers, despite contracting margins.
"We estimate that the core margin came in 4.6pp worse than consensus, driven largely by a 485bps higher core non-comp ratio... We reduce our 2023E/24E EPS by 5%/1%, and increase our 2023E P/E target multiple to 13x (from 12x), resulting in our 12-month price target of $38 (was $37)."