Investing.com -- UBS downgraded Jefferies Financial Group to "neutral" from "buy" on Thursday, saying the stock’s recent rally has left little room for further gains even as the brokerage raised its price target and quarterly earnings estimate ahead of next week’s results.

Analysts raised the 12-month price target to $67 from $59, based on a 13.5 times multiple on 2027 estimated earnings per share and a 1.7 times multiple on one-year forward tangible book value.

Jefferies shares have risen 19% over the past month and 50% over the past quarter, compared with gains of 2% and 11%, respectively, for peers, UBS said.

"We downgrade Jefferies (JEF) to Neutral from Buy reflecting limited upside, with our 13x blended target multiple on our ’27E EPS already embedding elevated advisory and ECM expectations," the analysts said, adding that "applying a premium multiple to our aboveconsensus ’27E EPS implies only modest upside, supporting our Neutral stance."

UBS raised its second-quarter earnings-per-share estimate by 95% to $1.45, more than 40% above the consensus estimate of $1.01, citing strength in advisory and equity capital markets revenue.

The brokerage’s full-year 2026 EPS estimate rose 23% to $4.40, while its 2027 estimate rose 2% to $5.10.

The broker said roughly 60% of Jefferies’ deal flow has historically come from sponsor-driven activity, compared with 45% to 50% for peers, leaving the firm more exposed to a slower recovery in that segment.

A Pitchbook survey cited in the report found 44% of limited partners surveyed do not expect an accelerated ramp in exit activity.

Jefferies has moved up the global advisory league table to sixth place in 2025 from 11th in 2018.

UBS estimates advisory revenue will average about 1.5 times 2021’s record levels between 2026 and 2028, with 2027 advisory revenue projected at $2.84 billion, against $1.87 billion, in 2021.

The brokerage said a near-term catalyst, open-market share purchases by Sumitomo Mitsui Banking Corp under a joint venture with Jefferies, "appears largely done," while longer-term benefits from the partnership "will take time to materialize."

UBS estimates the market is pricing in advisory fees of about $2.8 billion for 2026, roughly 7% above its own estimate. Return on tangible common equity is projected to reach 14% in 2027 and 15.1% in 2028.