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Valued at a market cap of $9.8 billion, MarketAxess Holdings Inc. (MKTX) operates an electronic trading platform for institutional investors and broker-dealer companies. The New York-based company offers institutional investors access to global liquidity in products like U.S. high-grade corporate bonds, emerging markets and high-yield bonds, European bonds, U.S. agency bonds, credit derivatives, and other fixed-income securities.
Shares of this financial company have lagged behind the broader market over the past 52 weeks. MKTX has gained nearly 13.7% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 31.8%. Moreover, on a YTD basis, the stock is down 10.6%, compared to SPX’s 25.8% gains.
Zooming in further, MKTX’s underperformance looks even more pronounced when compared to the Financial Select Sector SPDR Fund’s (XLF) 45.4% gain over the past 52 weeks and 36.3% return on a YTD basis.
On Nov. 6, shares of MKTX fell 1.5% after its Q3 earnings release. The company’s revenue increased 20% year-over-year to $206.7 million and surpassed the Wall Street estimates of $205.5 million, while its EPS of $1.90 climbed 30.1% from a year ago and exceeded the consensus estimates of $1.82. The strong results were primarily driven by robust growth in U.S. high-grade, emerging markets and Eurobonds commission revenues coupled with a strong increase in service revenues. Moreover, the company also delivered a record portfolio trading average daily volume of $1.1 billion.
For the current fiscal year, ending in December, analysts expect MKTX’s EPS to increase 7% year over year to $7.37. The company’s earnings surprise history is promising. It surpassed the consensus estimates in each of the last four quarters.
Among the 14 analysts covering the stock, the consensus rating is a “Moderate Buy,” which is based on four “Strong Buy,” nine “Hold,” and one “Moderate Sell” rating.
On Nov. 7, UBS maintained a “Buy” rating on MKTX and raised its price target to $335, the Street-high price target, which indicates a notable 28% upside potential from the current levels.
The mean price target of $278.75 represents a modest 6.5% upside from MKTX’s current price levels.
On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here. More news from Barchart
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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