Deutsche Bank: Owning Nasdaq OMX Group, Inc. Could Reward Investors In The Long-Term

Jayson Derrick
0

On Thursday, Brian Bedell of Deutsche Bank released a year-end strategy report on Brokers, Asset Managers and Exchanges. The analyst favors owning shares of Nasdaq OMX Group, Inc. (NASDAQ: NDAQ) along with InterContinental Exchange (NYSE: ICE).

The two exchanges offer investors "earnings per share growth/valuation stories though still benefiting from higher volumes."

"We are constructive on Nasdaq's progress over many years in creating a lower-risk, high-recurring revenue business model with solid execution, especially in cost management," Bedell wrote. The analyst said that the exchange continues to gain traction among investors following an improvement in the company's price to earnings ratio.

Bedell favors owning shares of Nasdaq OMX following a recent pullback in the company's valuation versus its peers. Additionally, the analyst argues that a slow intermediate-term revenue growth trajectory is priced into the valuation. Finally, a potential acquisitive growth strategy may restrain capital return ratio below some of its peers, but the company could benefit from “attractive tangential revenue” as well as expense synergy opportunities.

Bottom line, Bedell believes that in the longer term, management's solid execution history should reward investors with a higher valuation.

Shares were upgraded to Buy from Hold with a price target raised to $49 from a previous $46.

Latest Ratings for NDAQ

Oct 2014

Deutsche Bank

Upgrades

Hold

Buy

Sep 2014

Deutsche Bank

Initiates Coverage on

Hold

Jul 2014

Barclays

Maintains

Overweight

View More Analyst Ratings for NDAQ
View the Latest Analyst Ratings

See more from Benzinga

© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Advertisement

Recommended Stories

  • Dow Jones Falls As Donald Trump Stock Craters; Cathie Wood Buys This Stock Amid 51% Plunge

    The Dow Jones fell as Elon Musk made a Tesla move. The Donald Trump stock sank on the stock market today. Cathie Wood bought a diving stock.

  • Stock Selloff Spreads as Middle East Tension Rises: Markets Wrap

    (Bloomberg) -- European stocks tumbled, following a selloff in Asia and on Wall Street that was sparked by angst over elevated US interest rates and fueled by signs of fading momentum in China’s economy and rising tensions in the Middle East.Most Read from BloombergBeyond the Ivies: Surprise Winners in the List of Colleges With the Highest ROITrump Media’s $5.3 Billion Selloff Deepens as 270% Rally FizzlesS&P 500 Breaks Below 5,100 as Big Tech Sells Off: Markets WrapIran’s Attack on Israel Spark

  • Trump Media stock tanks on move to issue millions of shares

    Trump Media stock slid as much as 16% on Monday after the parent company of Donald Trump's social media platform, Truth Social, filed to issue more than 21 million shares.

  • 4 Oversold Stocks to Buy Right Now

    Here are four stocks to buy now that could offer investors upside in the short and long term.

  • Tesla layoffs hit high performers, some departments slashed, sources say

    Tesla management told employees Monday that the recent layoffs -- which gutted some departments by 20% and even hit high performers -- were largely due to poor financial performance, a source familiar with the matter told TechCrunch. The layoffs were announced to staff just a week before Tesla is scheduled to report its first-quarter earnings. The move comes as Tesla has seen its profit margin narrow over the past several quarters, the result of an EV price war that has persisted for at least a year.

  • Nvidia Reveals 8 'Secrets' For When To Sell Stocks. No. 2 Is Key.

    As top growth stocks like Nvidia test key moving averages, keep in mind these proven rules for when to sell stocks.

  • Elon Musk Agrees With Jamie Dimon's Warning Of Political Polarization 'Creating Risks That Could Eclipse Anything Since World War II'

    JP Morgan Chase & Co. (NYSE:JPM) CEO Jamie Dimon's annual shareholder letter is a moment investors await to understand the thinking of one of the world's most influential bankers. While there has been speculation of Dimon entering politics, with him even gaining the support of billionaire hedge fund manager Bill Ackman to run for president, JP Morgan shared in a statement that "Jamie has no plans to run for office" and that "he is very happy in his current role." That has not stopped him from oc

  • Dow Jones Futures: Another Ugly Market Reversal; Nvidia Skids, Tesla Tumbles On 'Dark Day'

    Mideast fears and surging yields triggered another ugly market reversal. Nvidia and Microsoft fell while Tesla dived.

  • Bitcoin Halving May Lead to Some Sales, Crypto.com CEO Says

    (Bloomberg) -- Bitcoin selling may become evident as the date of the so-called halving nears but the event is set to bolster the price of the largest digital asset longer term, according to the head of the Crypto.com exchange.Most Read from BloombergBeyond the Ivies: Surprise Winners in the List of Colleges With the Highest ROIIran’s Attack on Israel Sparks Race to Avert a Full-Blown WarApple Faces Worst iPhone Slump Since Covid as Rivals RiseIsrael Versus Iran — What All-Out War Could Look Like

  • Xiaomi’s Success Means More Trouble for Battered China EV Stocks

    (Bloomberg) -- Xiaomi Corp.’s roaring entry into the electric vehicle market is dimming the recovery outlook for China’s beaten down auto startups.Most Read from BloombergBeyond the Ivies: Surprise Winners in the List of Colleges With the Highest ROIIran’s Attack on Israel Sparks Race to Avert a Full-Blown WarApple Faces Worst iPhone Slump Since Covid as Rivals RiseIsrael Versus Iran — What All-Out War Could Look LikeTesla Executive Baglino Leaves as Musk Loses Another Top DeputyHype around the