Tuesday, December 7, 2010

21 Percent of Jefferies (NYSE:JEF) Debt Long Term

Jefferies Group (NYSE:JEF) has 21 percent of their overall debt in long term vehicles, moving closer to giant bankers like Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS).

Ticonderoga said, "JEF should have a solid Q4. We are leaving our FQ4'10 estimate unchanged at $0.44 per share. Note we recently revised our FQ4'10 EPS estimate from $0.35 on November 5th. Our 2011 EPS estimate remains at $1.39... Intra-quarter, JEF raised $500mm of long-term debt. Pro-forma for the debt raise, total long term debt is now 21% of total financing (includes short-term and equity) compared to 14% at the end of March. While there is still plenty of work to do, this trend is moving in the right direction in our view. We note that 34% and 38% of total financing for Goldman Sachs and Morgan Stanley, respectively is from long-term debt."

Ticonderoga maintains their "Neutral" rating on Jefferies, which closed Monday at $26.09, up by $0.12, or 0.46 percent.

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