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Summer Ends With A Wimper For Nasdaq, Barclays Lowers Estimates

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Summer Ends With A Wimper For Nasdaq, Barclays Lowers Estimates

Barclays cut its third-quarter and full-year earnings estimates for Nasdaq Inc (NASDAQ: NDAQ) following weak August volumes, suggesting a seasonally slow end of summer and stubbornly low market volatility.

"Industry U.S. cash equity average daily volume (ADV) in August was 6.1 million, down 7–8 percent," according to Barclays, "bringing our estimate for the quarter down to 6.5 million from 6.8 million."

"Market share fell 10bps to 16.6 percent, causing Barclays' third-quarter market share estimate to slip a bit to 16.7 percent. On the European cash side, the value of shares increased by 4 percent, while August ADV fell by 3 percent, pushing our 3Q16 estimate to 405k from 440k."

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On the derivatives front, U.S. equity options ADV fell 8 percent sequentially to 12.6 million. Market share trends declined to 39.1 percent from 39.7 percent. As such, Barclays' third quarter estimate slipped to 39.5 percent from prior 40 percent.

Meanwhile, European derivative ADV for August came in at 293,000 roughly 2 percent lower sequentially.

"We expect ADV to improve in September given seasonal trends, but are lowering our 3Q16 forecast to 325k from 398k," analyst Kenneth Hill wrote in a note.

Consequently, Hill cut third EPS estimate to $0.91 from $0.96, and reduced FY16 EPS view to $3.68 from $3.76 and FY17 EPS estimate to $4.30 from $4.35.

As a result, the analyst's price target moves to $79 from $80.

However, the brokerage maintains its Overweight rating on the stock, which is currently down 1.05 percent to $70.75.

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Latest Ratings for NDAQ

DateFirmActionFromTo
Apr 2021OppenheimerMaintainsOutperform
Apr 2021BarclaysMaintainsOverweight
Apr 2021RosenblattMaintainsNeutral

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