Wall Street just got a new sign that a deal rebound is getting higher.
Investment bank Jefferies Financial Group (JEFF) reported fourth-quarter and full-year results Wednesday afternoon that showed fees for its M&A advisory business soared 91% from the year-ago quarter to $597 million.
For the full year, investment banking fees rose 51% from the previous year to $3.44 billion, marking the investment bank's second-highest annual results ever.
Jefferies' profit for the same period climbed 156% to $691 million, a hair below the $694 million expected by analysts, according to data compiled by Bloomberg.
Jefferies stock moved slightly lower in after-market trading on Wednesday. US markets will not open again until Friday. The stock has doubled in the last 12 months.
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The Jefferies results give investors their first official look at how the investment bank rebound across Wall Street played out toward the end of 2024, ending a two-year drought that began in 2022.
Wall Street banks had it many reasons to cheer at the end of 2024. The US economy resisted higher interest rates as stocks rose. Companies issued record levels of debt, deal-making rebounded, and trading revenues appeared poised to continue growing.
Since the election, bankers and other finance executives have been optimistic about how the new Trump administration could be more favorable to their businesses, by loosening regulations and making it easier for companies to merge.
Investors sent US financial stocks soaring in November in response to Donald Trump's victory in the presidential election. Those for Wall Street's biggest banks all gained more than an index that tracks US banks (^BKX) thanks in part to their Wall Street operations, though many of these stocks have traded sideways since that initial surge.
Jefferies is up 24% since Trump became president-elect.
“Jefferies enters 2025 in the best position ever in our company's sixty-two year history,” CEO Richard Handler said in the fourth quarter earnings release.
“After decades of hard work, we're at the front of the pack,” added Handler.
Whether the rally in big bank stocks that raged through November or stalls will be tested starting Wednesday when JPMorgan Chase (JPM), Citigroup (C), Goldman Sachs (GS) and Wells Fargo (FCW) reported fourth quarter and full year earnings results.
Like Jefferies, those firms are all expected to see significant jumps in their investment banking fees from a year ago, with JPMorgan leading the pack. However, analysts do not anticipate that their M&A business will show a uniform improvement since the fourth quarter of last year.