Jefferies's stock pops to all-time high on dividend boost and earnings beat

By Steve Gelsi

Investment bank rallies as it lifts its dividend by nearly 17% and gives bullish outlook

Jefferies Financial Group Inc.'s stock touched an all-time high Thursday after the investment bank boosted its dividend by nearly 17% and said it expects a strong second half.

"We expect margins to continue to improve as...the market for investment banking activity continues to strengthen," the bank said.

Jefferies's stock (JEF) advanced by 6.6% in a mixed day of trading for bank stocks as investors sifted through the results of the Fed's annual stress test.

Earlier in the session, the stock rose 6.9% to $49.17, which was the stock's first record level since May 16, 2008, when it closed at $49.01, according to Dow Jones Market Data.

Jefferies reported stronger-than-expected second-quarter profit and revenue after the closing bell on Wednesday.

"We are increasingly optimistic about the second half of 2024 and 2025 based on our backlog and trends we observe today," Jefferies Chief Executive Richard Handler said in a statement.

Jefferies said it's lifting its quarterly dividend to 35 cents a share, up 16.7%.

Jefferies said its second-quarter profit for the three months ending May 31 jumped to $145.74 million, or 64 cents a share, from $12.4 million, or 5 cents a share, in the year-ago period. Analysts were looking for a profit of 63 cents a share, according to FactSet consensus estimates.

Second-quarter revenue jumped 60% to $1.66 billion, ahead of the analyst estimate of $1.59 billion.

During the quarter, Jefferies completed its $115 million sale of automobile-finance company Foursight Capital to OneMain Holdings Inc. (OMF) and made investments in technology to "support our future growth."

Jefferies's stock has risen by 21.1% in 2024, compared to a 14.9% increase by the S&P 500 SPX.

-Steve Gelsi

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06-27-24 1421ET

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