Deutsche Bank favours exchanges amid market volatility, upgrades Intercontinental

Investing.com -- Intercontinental Exchange was upgraded to Buy from Hold by Deutsche Bank, which said exchanges appear best positioned among financial market firms as volatility lifts trading activity.

The bank said it favors exchanges and trading platforms in the near term among brokers, asset managers and trading companies, citing a market backdrop marked by geopolitical risks and higher volatility.

Deutsche Bank raised its rating on Intercontinental Exchange as part of a broader review of the sector following fourth-quarter earnings, while updating profit estimates and price targets with less than a month left in the first quarter.

The brokerage said exchanges offer the most attractive setup across its coverage universe. It rates seven of the ten companies in the group as Buy and named Cboe Global Markets as its top near-term pick.

Exchanges typically benefit when market swings increase trading volumes and demand for hedging tools, which can support revenue from derivatives, data services and transaction fees.

The bank’s outlook assumes two interest rate cuts by the Federal Open Market Committee in 2026, now expected in the third and fourth quarters. It kept its forecast for the S&P 500 at about 8,000 by the end of the year but said most of the market’s gains are likely to come late in the year given current geopolitical uncertainty.

Deutsche Bank said online brokerages remain attractive, with three companies rated Buy. It named Charles Schwab as its preferred value pick and Robinhood Markets as its top growth pick.

Traditional asset managers rank next in the bank’s preference list, with three of seven stocks rated Buy and BlackRock highlighted as its top near-term pick.

Alternative asset managers follow, where six of eight stocks carry Buy ratings and Blackstone stands out as the bank’s favored name.

Deutsche Bank said the combination of market volatility and its macro outlook supports stronger relative performance for exchanges compared with other parts of the financial sector.

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