Credit Suisse Raises NASDAQ OMX Group Price Target

Credit Suisse raised its price target on NASDAQ OMX Group, Inc. NDAQ from $44 to $57 and maintained an Outperform rating.

After meeting with Hans-Ole Jochumsen, President of Global Trading and Market Services for NASDAQ, analyst Ashley N. Serrao believed “the next leg of the story will be driven by 1) a re-rating of a cash flow rich franchise (8 percent FCF yield) 2) expense-driven operating leverage from technology solutions and other further firm-wide efficiencies 3) continued buybacks (the stock is still below the $55 SOTP analysis laid out at investor day earlier this year).”

Serrao also believed a “decision on NLX will be made over the next 12 months, perhaps sooner, especially if open access doesn't survive in ESMA's forthcoming final draft rules in the next few weeks–in our view it doesn't matter if open access survives or not; either way we see increased probability of $0.16-$0.20 coming back to shareholders.”

Growth could also come with NDAQ making a "concerted push into the FX arena next year, thereby fulfilling the currency component of Mr. Jochumsen's FICC mandate," according to Serrao.

The analyst note concluded that “while a re-rating to SOTP-implied prices is debatable, we believe with volume expectations heading into next year already rich Nasdaq is well-positioned relative to exchange peers if volumes turn out to be less rosier than expected.”

NASDAQ OMX Group recently traded at $46.47, up 0.85 percent.