Jefferies has initiated coverage on Jefferson Capital Inc (JCAP) with a Buy rating and a $29 price target, citing the company’s differentiated technology-driven model, consistent financial performance, and clean regulatory track record.
JCAP, which acquires and manages charged-off and insolvent consumer debt, operates across North America, the U.K., and Latin America. Jefferies views the company as well-positioned to benefit from a rising supply of distressed debt, particularly as elevated net charge-offs from recent years begin to enter the collections pipeline.
The report highlights JCAP’s asset class and geographic diversification as core advantages, supporting better portfolio pricing, stronger returns, and a more sustainable growth trajectory than its peers. Despite its international presence, the firm estimates JCAP has captured less than 10% of the total addressable market in each of its core regions, indicating substantial room for expansion.
JCAP is also planning to enter new markets, including Mexico, Chile, Spain, and additional European countries, as part of its long-term growth strategy.
Financially, Jefferies noted JCAP’s compound annual revenue growth of over 16% and return on average equity above 40%. Its relatively low operating costs contribute to wider margins and more efficient cash use compared to competitors.
The firm also pointed to JCAP’s strong regulatory standing as a key competitive edge, helping it scale in highly regulated markets where rivals may face operational headwinds.
Jefferies’ $29 price target implies roughly 10x its projected 2027 earnings, with valuation comparisons drawn from peers like Encore Capital, PRA Group, and OneMain.