On Tuesday, Argus raised the price target on Nasdaq OMX Group Inc. (NASDAQ:NDAQ) shares to $66 from $64, while reiterating a Buy rating.
The firm cites strong business fundamentals and potential growth from an expanding data services range and increased equity-related trading and ETF index revenues.
Nasdaq reported its first quarter 2024 non-GAAP earnings per share (EPS) of $0.66, a slight decrease from $0.69 in the same period the previous year.
The dip in earnings is attributed to costs related to the acquisition of Adenza. However, net revenue for the quarter showed a significant increase, rising 22% to reach $1.12 billion.
In March, a notable transaction involving Nasdaq shares occurred when Borse Dubai conducted a secondary offering of approximately 27 million shares, priced at $59 each.
Following the sale, Borse Dubai's stake in Nasdaq has been reduced to just over 10%. It is important to note that Nasdaq did not receive any proceeds from this transaction.
The optimism from Argus is rooted in the anticipated growth in recurring revenues from Nasdaq's data and information services, along with a reduced dependence on transaction revenues.
The firm's position is that the current trajectory warrants the continuation of a Buy rating and justifies the increase in the price target to $66, up from the previous $64.
InvestingPro Insights
InvestingPro data highlights Nasdaq OMX Group Inc. (NASDAQ:NDAQ) as a company with a solid track record, reflected in its consistent dividend growth, with a notable 10% increase in its last dividend. The company's market capitalization stands at $34.95 billion, and despite a slight revenue decline of 0.31% over the last twelve months as of Q1 2024, Nasdaq has shown a strong gross profit margin of 66.04%. Additionally, its operating income margin is healthy at 29.86% for the same period.
InvestingPro Tips for Nasdaq suggest a mixed outlook. On the positive side, Nasdaq has raised its dividend for 12 consecutive years, indicating a commitment to returning value to shareholders. Moreover, the company has been profitable over the last twelve months and has delivered a strong return over the last decade. On the other hand, 13 analysts have revised their earnings estimates downwards for the upcoming period, and the company is trading at a high earnings multiple with a P/E ratio of 32.48. Analysts also anticipate a sales decline in the current year.
For readers looking to delve deeper into the financial health and future prospects of Nasdaq OMX Group Inc., there are additional InvestingPro Tips available. By using the coupon code PRONEWS24, readers can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription to access these insights and more at https://www.investing.com/pro/NDAQ.
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