UBS Cuts Jefferies to Neutral After 50% Rally, Raises Price Target to $67
JEF•UBS downgraded Jefferies Financial Group to neutral from buy after a 50% rally in the past quarter and lifted its 12-month price target to $67 from $59. The broker boosted its Q2 EPS estimate by 95% to $1.45 and raised 2026 and 2027 EPS forecasts to $4.40 and $5.10.
1. Analyst Downgrade and Price Target
UBS moved Jefferies from a buy rating to neutral, citing limited upside after a recent 50% stock surge. The firm simultaneously raised its 12-month price target to $67 from $59 based on a 13.5x multiple of projected 2027 earnings per share.
2. EPS Forecast Upgrades
The brokerage increased its Q2 EPS projection by 95% to $1.45, exceeding consensus by over 40%. It also lifted its full-year 2026 EPS estimate to $4.40 (up 23%) and 2027 EPS to $5.10 (up 2%).
3. Stock Rally vs. Peers
Jefferies shares have gained 50% over the past quarter and 19% in the last month, outpacing peer averages of 11% and 2%, respectively. The rally reflects strength in advisory and equity capital markets revenue.
4. Upside Constraints
UBS highlighted that roughly 60% of Jefferies’ deal flow is sponsor-driven, making it more sensitive to a lagging recovery in that segment. The report noted that major catalysts like open-market share purchases by Sumitomo Mitsui appear largely complete.
