How Jefferies Is Playing 3 Major Brokerages Before Earnings

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Several major brokers, asset managers and exchanges are soon to report their fist quarter 2015 financial results. In a recent report, analysts at Jefferies look into some of these companies, and provide a preview of the earnings, which they expect to come in up 4 percent across the group. The specialists explain that "the modest reduction predominantly reflects a continued slowdown in trading throughout the quarter. Interest rate movements remain the primary macro variable." Charles Schwab Corp
SCHW
(Buy Rated, $35 Price Target) is Jefferies' top pick, as it is "positioned best to benefit from initial interest rate increases, but also via asset gathering momentum." However, their first quarter estimate was trimmed by 1 cent, to $0.23, in line with the company's pre-announced results. TD Ameritrade Holding Corp.
AMTD
(Hold Rated, $36 Price Target, up from $34) also saw its fiscal second quarter projections revised, down to $0.35, from $0.38. Full year estimates were also cut by 2 cents, to $1.56. The analysts state that "despite coming off a 6th year of double-digit asset growth, [they] continue to forecast a conservative 7% organic growth rate. Management has guided to a range of +7-11% for FY2015." Estimates were reduced for E*TRADE Financial Corp
ETFC
(Hold Rated, $27 Price Target, up from $23) too. First quarter non-GAAP EPS are now expected at $0.11, down from $0.25. Full year EPS are modeled at $1.02.
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Posted In: Analyst ColorPreviewsAnalyst RatingsTrading IdeasJefferies
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