On Wednesday, Keefe, Bruyette & Woods adjusted its price target for MarketAxess Holdings Inc. (NASDAQ: MKTX), a leading trading platform for fixed-income securities, decreasing it to $230 from the previous $235. The firm has maintained a Market Perform rating on the stock.
The revision follows MarketAxess's recent financial performance, where the company reported an earnings per share (EPS) that surpassed Keefe, Bruyette & Woods's expectations by six cents and consensus estimates by five cents. This beat was attributed to a combination of lower expenses, which contributed nine cents to the EPS, reduced non-operating expenses adding one cent, and a lower share count contributing another cent. These positive factors were slightly offset by a four-cent impact from lower revenues and a one-cent decrease from reduced interest income.
Despite the EPS beat, Keefe, Bruyette & Woods has revised its forward estimates for MarketAxess primarily due to anticipated declines in market share in high-grade (HG) bonds and lower distribution fees. The firm has slightly increased its 2024 EPS estimate for MarketAxess by a penny, reflecting the company's performance in the recent quarter.
The new 12-month price target of $230 represents a modest decrease from the previous target but still implies a neutral outlook from Keefe, Bruyette & Woods, as indicated by the unchanged Market Perform rating. The rating suggests that the firm anticipates the stock will perform in line with the broader market or its sector peers over the next year.
MarketAxess's recent financial results and the subsequent price target adjustment highlight the dynamic nature of the fixed-income trading market and the factors that can influence a company's stock valuation, such as earnings performance, market share, and fee structures.
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