Assessing Jefferies Financial Group (JEF) After Recent Share Pullback And

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• If you are wondering whether Jefferies Financial Group is offering good value right now, it helps to step back and look at both its recent share performance and what the numbers say about the price you are paying.

• The stock last closed at US$58.94, with returns of a 3.7% decline over the past week, an 8.9% decline over the past month, a 7.1% decline year to date, and gains of 64.5% over three years and 146.2% over five years.

• Recent coverage around Jefferies Financial Group has focused on its role as a diversified financial services provider and how investors are reacting to shifts in sentiment toward the sector. Together with the share price moves, this news flow has put more attention on whether the current price fairly reflects the company’s fundamentals.

• Right now, Jefferies Financial Group has a valuation score of 2 out of 6, reflecting how often it screens as undervalued on a set of standard checks. Next we will break down those valuation methods and then finish with a more complete way to think about what the stock could be worth.

Jefferies Financial Group scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

The Excess Returns model looks at how much profit a company is expected to generate over and above the return that equity investors require, then ties that back to the value of its equity per share.

For Jefferies Financial Group, the model starts with a Book Value of US$51.26 per share and a Stable EPS of US$4.98 per share, based on weighted future Return on Equity estimates from 4 analysts. The Average Return on Equity is 8.69%, while the Cost of Equity is put at US$5.33 per share. This implies an Excess Return of US$0.35 per share in the model.

The Stable Book Value is US$57.31 per share, based on estimates from 3 analysts. Combining these inputs, the Excess Returns framework produces an estimated intrinsic value of about US$51.40 per share.

Against the recent share price of US$58.94, this implies the stock is about 14.7% overvalued on this measure. The Excess Returns model is therefore signaling a valuation premium rather than a discount.

Result: OVERVALUED

Our Excess Returns analysis suggests Jefferies Financial Group may be overvalued by 14.7%. Discover 53 high quality undervalued stocks or create your own screener to find better value opportunities.