UPDATE: Compass Point Initiates Coverage on KCG Holdings on Positive Outlook

In a report published Friday, Compass Point analyst Douglas Greiner initiated coverage on

with a Buy rating and $11.00 price target. In the report, Compass Point noted, “We initiate coverage of the recently formed KCG with a Buy rating and $11 price target. Several significant events have unfolded over the last twelve months raising concerns and complicating analysis for investors. Consequently, many shareholders who previously had praised the company have now exited their holdings, there is zero sell side support in terms of Buy ratings, and the shares currently trade at .88x pro forma 1Q'13 TBV of $10.18 (the most recent company reported figure) or at .97x our estimate of pro forma 2Q'13 TBV of $9.29. There are several risks and concerns that could prevent a turnaround and result in significant deterioration to TBV. However, from our vantage point, we find reason to be more positive. We expect the synergies from the Knight Capital / Getco reverse merger to act as a catalyst over the next three years. The combined entity will benefit from $90-$110 million of cost savings and be well positioned to mitigate, or better yet turn around, eroding profitability at legacy Getco.” KCG Holdings closed on Thursday at $8.98.