Jefferies Financial (JEF) is expected to report a "strong" fiscal Q2 amid favorable investment banking trends, Oppenheimer said in a Friday note.

Activity across key investment banking markets strengthened during Jefferies' fiscal reporting period, according to the brokerage.

Investment-grade bond issuance rose 49% year over year, while high-yield issuance increased 48%. Equity capital markets activity climbed 72%, and announced and completed M&A volumes also posted sharp gains from a year earlier.

Oppenheimer raised its fiscal Q2 earnings estimate to $1.17 per share from $0.95. Analysts polled by FactSet expect earnings of $1.02 per share.

The brokerage said companies appear to be pushing ahead with strategic transactions and financings despite geopolitical uncertainty. It also said losses tied to First Brands and MFS were modest relative to Jefferies' earnings power and balance sheet strength.

Oppenheimer maintained an outperform rating on the stock and raised its price target to $87 from $72.

Shares of Jefferies were up 4.4% in Friday trading.

Price: 62.28, Change: +2.62, Percent Change: +4.39