Thursday, December 16, 2010

Jefferies (NYSE:JEF) Weighed by Fixed Income

The financial sector is facing a number of challenges going forward, not the least the growing weakness of fixed income, which will hinder Jefferies Group (NYSE:JEF), says Goldman Sachs (NYSE:GS).

They said, "JEF should see particular benefit in its improved banking capabilities and high yield issuance, but fixed income could remain pressured amid a tough mini trading environment, lower rate volatility, and risk off trades in 4Q10."

EPS for 4Q10 was raised from $0.25 to $0.29. 2011/2012 EPS estimates of $1.45/1.65 were kept the same.

Goldman reiterates their "Sell" rating on Jefferies Group, which closed at $26.21 Wednesday, up $0.39, or 1.51 percent. Goldman has price target of $22 on them.

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