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Investing.com -- Jefferies initiated coverage of Jefferson Capital Inc with a Buy rating and a $29 price target, pointing to the company’s differentiated tech-based model, consistent financial outperformance, and strong compliance credentials.
JCAP, which specializes in purchasing and managing charged-off and insolvent consumer accounts, operates across the U.S., Canada, U.K., and Latin America.
The firm sees the company as well-positioned to capitalize on a growing supply of distressed debt, particularly as the spike in net charge-offs from 2022–24 filters into the collections market.
Jefferies highlighted JCAP’s asset class and geographic diversification as key advantages over peers, enabling better pricing, higher returns, and sustained long-term growth.
The firm said JCAP has captured less than 10% of the total addressable market in each region, suggesting significant runway ahead.
Long-term expansion plans include entry into Mexico, Chile, Spain, and several European markets.
The company has delivered revenue growth at a compound annual rate of more than 16% and maintains a return on average equity above 40%, according to the report.
Its lower operating expense base supports stronger margins and a more favorable cash efficiency ratio than peers.
Jefferies also emphasized JCAP’s “pristine” regulatory record, allowing it to expand steadily while competitors contend with compliance challenges.
The $29 price target equates to about 10 times the firm’s forecast 2027 earnings per share. Jefferies benchmarked the valuation against peers including Encore Capital (NASDAQ:ECPG), PRA Group, and OneMain, using a combination of P/E, P/BV, and ROE-based metrics.