On Wednesday, Citi reaffirmed its Buy rating and $310.00 price target for MarketAxess Holdings Inc. (NASDAQ:MKTX), a leading electronic trading platform for fixed-income securities. The firm's assessment followed MarketAxess' disclosure of its Average Daily Volume (ADV) metrics, which showed varied performance across different segments.
MarketAxess reported a total credit ADV of $13.4 billion, marking a 4% sequential decrease but an 11% increase year-over-year (YOY). The company's high-grade (HG) ADV was $6.1 billion, experiencing a 7% sequential decline but a 6% YOY rise. Conversely, high-yield (HY) ADV saw a reduction, down 8% sequentially and 13% YOY to $1.3 billion.
The report highlighted that emerging markets (EM) trading activity softened compared to recent months but still showed a robust 32% YOY growth. Additionally, Eurobond trading activity had a positive trend, with a 12% sequential increase.
MarketAxess' market share for high-grade bonds was consistent with expectations at 18.6%, compared to 17.9% in April and 20.2% in May 2023. However, the high-yield segment underperformed slightly, capturing 12.8% of the market, which was lower than the anticipated figures of 13.9% in April and 16.7% in May 2023. This outcome was attributed to low credit spread volatility and strong issuance during the month.
The firm's analysis suggests that while some segments experienced declines, overall activity remained strong on a year-over-year basis, and certain areas showed solid performance compared to recent trends.
In other recent news, MarketAxess Holdings Inc. reported a 13.5% year-over-year increase in its overall average daily volume (ADV) for May 2024, reaching $32.2 billion. This increase was accompanied by advancements in trading protocols and workflow tools, with total portfolio trading volume soaring by 136.2%. However, the firm also noted a decrease in U.S. high-yield ADV and market share, partially attributed to lower credit spread volatility and a focus on new issue calendars.
In a separate development, Keefe, Bruyette & Woods adjusted its price target for MarketAxess, reducing it to $230 from $235, while maintaining a Market Perform rating. This adjustment followed the company's recent financial performance, which surpassed the firm's expectations, despite a four-cent impact from lower revenues.
Lastly, MarketAxess announced its first-quarter earnings for 2024, showcasing a 4% increase in total revenue to $210 million, and earnings per share at $1.92.
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