Jefferies Financial Group outperformed third-quarter profit estimates, driven by a resurgence in dealmaking that propelled advisory fees to a record high. This provides an early indication of how Wall Street’s investment-banking sector may fare this earnings season. Jefferies is a global investment bank and financial services company, providing advisory, sales and trading, research and wealth management services. Sumitomo Mitsui Banking Corp recently agreed to raise its stake in Jefferies, signalling confidence in its cross-border dealmaking and equity capital markets capabilities.
Total investment banking net revenues at Jefferies jumped 20.3% to $1.14 billion compared to the previous year. Advisory revenue specifically rose 10.7% to a record $655.6 million for the quarter. Equity and debt underwriting revenues also saw significant increases, climbing 20.7% and 36.3%, respectively. According to Jefferies President Brian Friedman, the pipeline for 2026 remains strong, with expectations of Federal Reserve rate cuts boosting confidence in improved financing conditions.
Despite a brief slowdown in April due to tariff concerns, optimism surrounding mergers and acquisitions has remained robust. Companies have continued to pursue multibillion-dollar transactions across various sectors, demonstrating confidence in growth prospects and a willingness to invest capital despite policy uncertainties. Global dealmaking reached $2.6 trillion in the first seven months of the year, marking the highest level since the pandemic-era peak in 2021.
Net earnings attributable to common shareholders increased to $224 million, or $1.01 per share, for the three months ending August 31, up from $167.1 million, or 75 cents per share, the previous year. Analysts had anticipated a profit of 80 cents per share. Following the announcement, Jefferies shares experienced a 1.6% drop in after-market trading.
