The higher price target comes after the Carmel, IN-based provider of vehicle auction services reported solid results for the 2016 first quarter earlier this week.
The company said it had adjusted earnings of 55 cents per diluted share, beating analysts' estimates of 50 cents per share. Revenue was $745 million, above estimates of $694 million.
"Going forward, ADESA should continue to deliver outsized EBITDA expansion as favorable volume trends lever fixed costs while improving cycle times and increasing vehicle utilization also bode well for IAA," the firm wrote in a note.
ADESA is one of the company's core business units. It is a wholesale, used-vehicle auction operation with 66 locations. IAA is its salvage auto auction company.
Risks to share appreciation include competitive, economic, foreign exchange and commodity related risks, Jefferies said.
Shares of KAR Auction Services closed at $39.47 on Wednesday.
Separately, TheStreet Ratings Team has a "Buy" rating with a score of A- on the stock.
The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, notable return on equity and expanding profit margins. The team believes its strengths outweigh the fact that the company has had sub par growth in net income.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: KAR