Barclays Maintains an 'Overweight' on TD Ameritrade (AMTD); Interest Rates Swing to a Tailwind

Barclays maintains an 'Overweight' on TD Ameritrade (NASDAQ: AMTD), raises PT by $1 to $24.

Barclays analyst says, "Reporting record revenues, even in the midst of still punishingly low interest rates, we believe AMTD's f2Q11 is evidence of the firm's peer-leading organic growth through the cycle and strong positioning ahead of rising interest rates. While not as sensitive as SCHW to rising short-term rates, we believe the $0.28 of first-year EPS accretion from the first 100bps hike is not to be dismissed. For investors seeking rising interest rate exposure, we continue to recommend allocations to both Charles Schwab (Nasdaq: SCHW) and AMTD shares, with the added thesis benefit to AMTD shares from much stronger organic growth (2x SCHW's net new asset rate this quarter) and an aggressive capital return profile. Supported by both organic and environmental tailwinds, we have growing confidence in our 2011 EPS ($1.16) and 2012 EPS ($1.50) estimates."

"We are raising our fy2011 EPS estimate from $1.14 to $1.16 and our fy2012 EPS estimate from $1.43 to $1.50. We are raising our price target from $23 to $24, based on a 21x multiple on our new fy2011 EPS of $1.16."

For more ratings news on TD Ameritrade click here and for the rating history of TD Ameritrade click here.

Shares of TD Ameritrade closed at $21.68 yesterday.

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