Nomura Says E*TRADE (ETFC) Best Investment Among Brokers

November 26, 2012 2:39 PM EST Send to a Friend
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Price: $27.85 +3.26%

Rating Summary:
    14 Buy, 4 Hold, 2 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 16 | Down: 17 | New: 15
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Despite healthy equity market returns, trading activity has been sluggish at the online brokers, noted a report by Nomura Securities.

"While overall trading volumes have picked up slightly in November, we expect 4Q to stay soft as December tends to be slow," said analyst Keith Murray.

Murray likes TD Ameritrade (NYSE: AMTD) and Charles Schwab (NYSE: SCHW) as long-term rate plays but remains Neutral on them given that trading rates are likely to stay low for the foreseeable future.

"There is no question the E*TRADE (ETFC) story remains a bit complicated, EPS improvement will be slowed by low rates and de-leveraging, but we see attractive upside over the next 12 months as the legacy wind down continues at a solid pace, credit trends continue to improve, the core brokerage business is on solid footing, and the firm has meaningfully reduced its corporate interest expense," said Murray.

Nomura has a Buy rating on E*TRADE with a $10 price target.

For an analyst ratings summary and ratings history on E*TRADE click here. For more ratings news on E*TRADE click here.

Shares of E*TRADE closed at $8.14 yesterday.

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