UBS on eBrokers and Exchanges: Raising Price Targets
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Price: $75.19 -0.05%
Rating Summary:
17 Buy, 12 Hold, 2 Sell
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Today's Overall Ratings:
Up: 13 | Down: 11 | New: 14
Rating Summary:
17 Buy, 12 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 11 | New: 14
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UBS on eBrokers and Exchanges: Raising Price Targets
Analyst, Alex Kramm, said, "Following last week’s significant increase in U.S. Treasury and other government bond yields and our call that a long-term bear market in bonds has commenced, we are raising our price targets for most eBrokers and exchanges in our coverage, as we apply higher target multiples to our CY12 EPS estimates. Charles Schwab (Nasdaq: SCHW) (PT from $14 to $17) and CME Group (NYSE: CME) (PT from $311 to $330) remain our favorite plays on a rising rate environment within their respective groups."
"For the eBrokers, we believe investors will increasingly discount a more favorable rate environment and the potential for positive Fed action sooner than currently outlined. We are leaving our estimates unchanged for now, but see upside potential from higher IDA yields and lower money market fee waivers...We also see more upside potential for the exchange group. We believe increasing rate volatility and the prospect of higher absolute rates (more hedging) should be a positive for CME and NYSE Euronext (NYSE: NYX), which have sizable interest rate businesses."
Other stocks of note: E*TRADE (Nasdaq: ETFC), TD AMERITRADE (Nasdaq: AMTD) (PT from $16 to $22) and IntercontinentalExchange (NYSE: ICE) (PT from $152 to $164), FXCM (Nasdaq: FXCM) (PT from $13 to $15), NASDAQ OMX (Nasdaq: NDAQ) (PT from $29 to $30) and CBOE (Nasdaq: CBOE) (PT from $25 to $28)
Analyst, Alex Kramm, said, "Following last week’s significant increase in U.S. Treasury and other government bond yields and our call that a long-term bear market in bonds has commenced, we are raising our price targets for most eBrokers and exchanges in our coverage, as we apply higher target multiples to our CY12 EPS estimates. Charles Schwab (Nasdaq: SCHW) (PT from $14 to $17) and CME Group (NYSE: CME) (PT from $311 to $330) remain our favorite plays on a rising rate environment within their respective groups."
"For the eBrokers, we believe investors will increasingly discount a more favorable rate environment and the potential for positive Fed action sooner than currently outlined. We are leaving our estimates unchanged for now, but see upside potential from higher IDA yields and lower money market fee waivers...We also see more upside potential for the exchange group. We believe increasing rate volatility and the prospect of higher absolute rates (more hedging) should be a positive for CME and NYSE Euronext (NYSE: NYX), which have sizable interest rate businesses."
Other stocks of note: E*TRADE (Nasdaq: ETFC), TD AMERITRADE (Nasdaq: AMTD) (PT from $16 to $22) and IntercontinentalExchange (NYSE: ICE) (PT from $152 to $164), FXCM (Nasdaq: FXCM) (PT from $13 to $15), NASDAQ OMX (Nasdaq: NDAQ) (PT from $29 to $30) and CBOE (Nasdaq: CBOE) (PT from $25 to $28)
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