UPDATE: BMO Capital Markets Initiates Coverage on MarketAxess Holdings with Market Perform Rating, $33 PT
In a report published Friday, BMO Capital Markets initiated coverage on MarketAxess Holdings (NASDAQ: MKTX) with a Market Perform rating and $33.00 price target.
BMO Capital Markets noted, “We believe MarketAxess deserves the highest P/E multiple in our coverage universe owing to its dominant position in products at the early stages of the transition from voice to electronic trading, which we believe offers one of the most attractive long-term secular growth profiles of any trading market. We expect 10%-15% annual growth in MarketAxess's revenue (15%-20% annual growth in earnings) is a realistic medium-term run rate in the company's core existing businesses. Furthermore, we see potential upside in the coming years from the company's recent efforts in new customers groups, including dealer-to-dealer and dealer-to-client trading, and plans to operate a CDS Swap Execution Facility. Overall, we expect MarketAxess will continue to grow faster than most other companies in the exchange and trading space. However, with the shares trading at 20x our 2013 EPS estimate, we believe that potential growth is fully priced in and see some risk that a disappointing earnings growth trajectory over the next 12 months could result in multiple compression from current lofty levels.”
MarketAxess Holdings closed on Thursday at $31.62.
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