Citizens reiterates Jefferson Capital stock rating on distressed debt

Citizens has kept its Market Outperform rating on Jefferson Capital Holdings Inc. (NASDAQ:JCAP) and maintained its price target at $28.00. The investment firm attributes this to several factors, including an increasing supply of distressed securities, stable yields, and excess capital. Citizens also praised the company for its unique position in servicing small balance card portfolios from distressed retailers and auto write-offs.

The price target is calculated as about 9 times the firm's adjusted earnings per share forecast for 2027. Currently, the stock is trading at $20.49, with analyst projections suggesting a 42% upside potential. Jefferson Capital's market capitalization is $1.18 billion, offering a potential upside of 37% from current levels, leading to an estimated total return of 41% including dividends.

The company has shown strong financial results in the recent quarter, with adjusted earnings per share reaching $0.77, surpassing analyst expectations of $0.62. Revenue also grew by 16% year-over-year, reaching $178 million. This performance prompted Citizens to raise its price target from $26.00 to $28.00, while maintaining a Market Outperform rating. The firm emphasized Jefferson Capital's impressive volume growth as a significant contributor to these positive results.

Similarly, Raymond James upgraded its price target for Jefferson Capital shares, from $21 to $24, while keeping an Outperform rating. They highlighted the company's lower leverage and efficient collection model as key strengths. These developments reflect positively on Jefferson Capital's financial performance and operational strategies, suggesting potential upside for investors.