Wells Fargo maintained its Market Perform rating on Interactive Brokers Group, Inc. IBKR, which announced its decision to close its market making operations and solely focus on e-brokerage business.
Analyst Christopher Harris says the move isn't a complete surprise as Interactive Brokers has been reviewing this business for a long time and the pre-tax profit of the unit also fell significantly from $720 million in 2007 to $44 million in 2016.
Harris, who has a valuation range of $35 to $39 on the shares, expects the move to be dilutive to EPS and he models a 5 percent impact.
Though the investors may now ascribe higher value to e-brokerage business, the analyst said the current price cutting environment across the industry is “somewhat uncertain” for the commission-heavy e-brokerage business models.
“IBKR possess industry leading growth supported by cost and technological advantages relative to peers. However, due to near-term cyclical pressures in Brokerage and secular declines in Market Making, we view the shares as fairly valued,” Harris wrote in a note.
At last check, shares of Interactive Brokers fell 1.36 percent to $36.98.
Related:
10 Must Watch Stocks for Today
Biotech, Ciena, Nike, Panera: Fast Money Picks For March 9
Edge Rankings
Price Trend
© 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
date | ticker | name | Price Target | Upside/Downside | Recommendation | Firm |
|---|
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
