Barclays on U.S. Brokers, Asset Managers & Exchanges: Truing-Up Cash Equity Exchange Estimates

Barclays on U.S. Brokers, Asset Managers & Exchanges: Truing-Up Cash Equity Exchange Estimates

Barclays analyst says, "We are taking the opportunity to adjust our exchange volume forecasts for NYSE (NYSE: NYX) and NASDAQ (Nasdaq: NDAQ) with the month of May behind us and the first week in June providing an early read for the final month of the quarter. Overall, we are adjusting our volume forecasts lower across the board given current trends. U.S. cash equities average daily volume (ADV) is running at 7.1bn QTD, under our prior forecast of 7.3bn. Given the current volume trends, we are reducing our cash equities estimate to 7.1bn for the quarter, implying a 2% sequential decline in June volumes. Helping offset some of the lagging volumes, NDAQ and NYX have seen market share move steadily higher over the month of May, with QTD market share for NYX up nearly a full percentage point q/q to 26.6% and NDAQ up market share up 2 percentage points q/q to 22.5% for the month. We have seen these positive trends continue into June, and are adjusting our market share forecast higher to account for the trend."

"Given the above changes, our NYX 2Q11 EPS estimate moves to $0.58 from $0.62. Our FY2011 forecast moves to $2.64 from $2.70 and our price target moves to $40 from $41 based on the same 15x our new 2011 EPS estimate of $2.64. Our NDAQ 2Q11 EPS estimate remains at $0.59, but our FY2011 estimate moves slightly lower to $2.47 from $2.50. Our price target moves to $32 from $33 based on the same 13x our new 2011 EPS estimate of $2.47."

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