Ticonderoga Maintains a 'Neutral' on Piper Jaffray (PJC); Reports Miss - In-Line Revs Offset by Non-Comp

Ticonderoga maintains a 'Neutral' on Piper Jaffray (NYSE: PJC).

Ticonderoga analyst says, "PJC reported EPS of $0.38 vs. our estimate of $0.50 and consensus of $0.52. The miss looks to have been driven by higher than expected non-comp expenses; normalized non-comp expenses were up 2% from Q4'10 despite a 29% decline in revenues. Revenues were $124.8mm vs. our estimate of $124.7mm. ROE was 4%, and book value declined 5% from Q4’10 to $52.73; tangible book value declined 3% to $28.68. We suspect share issuances re: year-end comp drove the decline in BV."

Bottom Line: Shares will likely be weak on the report. The better than expected fixed income trading (which was the only banking/trading revenue line that really beat our estimate) appears to have been driven by muni prop. We are also concerned about the expense structure, which saw a seq. increase despite the sharp decline in revenues."

For more ratings news on Piper Jaffray click here and for the rating history of Piper Jaffray click here.

Shares of Piper Jaffray closed at $37.94 yesterday.

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