Barclays Says FXCM 'Upside Limited'

Barclays analysts said that FXCM Inc FXCM is "moving through a tough period, but upside limited" in a new note following the company's Q1 earnings. The continued overhang of the SNB's January decision and tough terms of a Leucadia National Corp. LUK bailout created a scenario that makes it very tough for FXCM to derive profit from, according to the research note. That is why Barclays reaffirmed its $1 price target, a level it says reflects the "implied sale price of the company given the payout with Leucadia."

Prior to the SNB volatility, FXCM was trading at $16.70. Following that week, the stock had slid more than 88 percent to below $2. The stock jumped higher last week following the Q1 earnings report, though the price has since sunk back towards its lows.

In operations though, Barclays did credit FXCM's management with weathering the storm. The analysts said that despite average daily volume down 7 percent month over month, they expect the company's growth initiatives to "begin to kick-in." Notably, the analysts pointed to FXCM's Contracts for Difference (CFD) program to lead to higher volumes as it exits a trial phase. Additionally, the revenue per million should boost as the company gets a greater mix of principal trading.

Barclays issued a forecast for 2016 EPS, which it expects at $0.32. Even given continued profitability, the analysts pegged the price target at $1 and held to their Neutral rating.