Jefferies Financial Group (JEF) is well positioned to benefit from a revival in M&A activity, particularly sponsor-driven transactions, while its earnings are less dependent on trading activity, Oppenheimer said in a Thursday note.

Oppenheimer said 58% of Jefferies' year-to-date capital markets revenue has come from investment banking, compared with 22% for Goldman Sachs (GS).

The firm raised its Q3 EPS estimate for Jefferies to $1.06 from $0.67.

Oppenheimer also increased its investment banking revenue estimate to $1.27 billion from $1.06 billion, while assuming trading revenue increases of 7.5% year over year.

Oppenheimer maintained the company's outperform rating and lowered its price target to $76 from $83.

Price: 47.80, Change: +0.45, Percent Change: +0.94