Goldman Sachs Maintains Sell on Jefferies Group After 4Q Operating EPS

Goldman Sachs has published a research report on Jefferies group JEF after the company reported 4Q operating EPS. In the report, Goldman Sachs writes, "Keep in mind, Jefferies previously indicated its FY4Q results would be ahead of the $0.10 operating EPS from prior quarter, so investors should not be overly focused on the headline print. Interest will remain on Jefferies balance sheet, business mix, and client activity trends. With leverage down 23% qoq to 9.9X and the end-of-FY4Q balance sheet at $35 bn (down 22% qoq), we will look for feedback on JEF's ability to deliver an ROE (7.2% for FY2011) that can drive a higher share price. Interestingly, for the third consecutive quarter, average assets of $50 bn were much higher than EOP assets. We will also look for the firm's commentary on its high debt yields and secured financing counterparties." Goldman Sachs maintains its Sell rating on Jefferies Group, which closed yesterday at $11.80.