UPDATE: Deutsche Bank Initiates Coverage On 4 U.S. Securities Exchanges

Analysts at Deutsche Initiated Coverage on four U.S. securities exchanges Thursday:

CBOE Holdings, Inc (NASDAQ: CBOE) - Buy rating; $63 price target. Shares unchanged.

CME Group Inc (NASDAQ: CME) - Buy rating; $85 price target. Shares up 1.11 percent.

Intercontinental Exchange Inc (NYSE: ICE) Hold rating; $202 price target. Shares down 0.88 percent.

NASDAQ OMX Group, Inc. (NASDAQ: NDAQ) - Hold rating; $46 price target. Shares down 1.1 percent.

Analysts offered insight of the current industry outlook:

Brian Bedell stated, “we prefer the more pure-play oriented business models of CBOE (top pick) and CME given our view that CBOE & CME have stronger intermediate-term cyclical volume catalysts and should maintain their valuation premiums over ICE and NDAQ for at least the next 1-2 years.”

Analysts see greater upside in shares of CBOE and CME due to four reasons:

• 1) Pure plays on trading volume
• 2) Organic growth potential
• 3) More defensible business model
• 4) Higher rate of capital return compared to NDAQ and ICE acquisitive strategies

In addition, analysts expect market structure debates to drive volatility, but not impact it, stating, “although they present risks, we think most of the issues will have limited earnings impacts & thus may create good trading opportunities within the exchange space.”

Bedell also feels that sector-moving strategic M&A is unlikely right now given the recent failed merger ideas over the past few years. Since ICE and NDAQ growth is more dependant on such activity, Bedell prefers CBOE and CME shares.

Following the coverage, shares of CME Group are performing the best early in Thursday’s session, up 1.11 percent