Keefe, Bruyette & Woods Changes Ratings And Targets On Exchange Stocks

Keefe, Bruyette & Woods adjusted ratings and estimates for exchange stocks Monday.

NASDAQ OMX Group, Inc. NDAQ was upgraded to from Market Perform to Outperform and its price target was raised from $45 to $55.

Analysts Niamh Alexander and Kyle Voigt thought “it's time to give NDAQ more credit for delivering growing cash earnings since the crisis and the recent rebase of each earnings due to the acquisitions.

“We are also encouraged that management has made it known that it looked at several deals recently but passed on pricing, preferring share repurchases at this 8 percent free cash flow yield.

“When we consider NDAQ relative to other capital markets or processing peer business that have similar cash earnings growth trends and cash distribution, it stacks up well everywhere except in its multiple, where it trades at a significant discount.”

CME Group Inc. CME was downgraded from Outperform to Market Perform and its price target remained at $92.

“We cannot get enough upside to command an Outperform here and see more potential upside in other stocks in our group. We concurrently lower estimates for the fourth quarter after such a very strong October has normalized lower ahead of the expected slow holiday weeks. We lower our 4Q14 EPS estimate to $0.90 from $1.01 and our forward EPS estimates remain unchanged,” according to Alexander.

Intercontinental Exchange Inc. ICE had its price target raised from $245 to $257 and am Outperform rating was maintained.

Alexander commented that “Every cloud has its sliver lining and the drop in oil prices and recent elevation in volatility is good for ICE's as well as CME's energy complex. While we're not boosting growth significantly, growth from a better base drives our forward estimates up slightly boosting our 4Q14 EPS estimate to $2.52, and we expect some of the heightened volatility to persist into 2015 driving up forward estimates.”

CBOE Holdings, Inc. CBOE rating was unchanged at Market Perform and as was its price target of $59.

The analyst noted lowered the “4Q14 EPS estimate for CBOE to $0.62 from $0.66 after the very strong start to the quarter has normalized lower a bit more quickly than we'd expected. We make no change to our forward estimates expecting $2.55 and $2.93 of EPS in 2015 and 2016, respectively.”

All the above stocks opened higher Monday with NASDAQ OMX Group, Inc. showing the most strength, recently trading at $46.47, up 1.73 percent.