Knight Capital Group's 4Q Disappoints JP Morgan

JP Morgan has published a research report on Knight Capital Group KCG after the company reported disappointing 4Q earnings results. In the report, JP Morgan writes "Knight reported adjusted 4Q10 EPS of $0.08, excluding the $0.02 positive impact of a tax deduction. This is less than half of our $0.20 estimate and the consensus. These results were characterized by low volume and volatility during the quarter. The firm generated a return on equity of just 4.0%. Despite a rebound in equity market levels, Knight had a weak quarter, given low industry volumes and volatility. The VIX fell 21% in the fourth quarter to end at 17.75. Equity volumes decreased 2% sequentially, fixed income volumes also saw a decline for the industry and spreads narrowed, making for a challenging backdrop for Knight earnings." JP Morgan maintains its Neutral rating and has raised the price target from $14 to $15.50. Knight Capital Group closed yesterday at $14.24.