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E*TRADE Reaches New 52-Week High

Zacks Equity Research

Shares of E*TRADE Financial Corporation (ETFC) crafted a new 52-week high, touching $19.55 at the beginning of the trading session on Dec 26. However, this investment broker closed the session at $19.46, which reflects a solid year-to-date return of 111.8%. The trading volume for the session was 1.61 million shares.

Despite hitting its 52-week high, this Zacks Rank #2 (Buy) stock has plenty of upside left, given its strong estimate revisions over the last 60 days and expected year-over-year earnings growth of 299.6%.

Growth Drivers

Rise in total daily average revenue trades (DARTs) for the month of November and impressive third-quarter 2013 results – including year-over-year earnings growth and decreased expenses – as well as a strong capital position were the primary growth drivers for E*TRADE.

On Dec 18, E*TRADE reported an upsurge in its DARTs for Nov 2013. According to the monthly market activity report for November, E*TRADE’s DARTs were 163,411, up 2% from Oct 2013. Moreover, DARTs increased 26% on a year-over-year basis.

E*TRADE reported its third-quarter 2013 earnings of 16 cents per share on Oct 23, improving significantly from a net loss of 10 cents per share in the prior-year quarter. However, results were in line with the Zacks Consensus Estimate.

A year-over-year decrease of 7.8% in core operating expenses and 13.0% rise in DARTs were the tailwinds for the quarter. Moreover, the company’s capital ratios depict its strong position. However, a 14.9% fall in net revenue acted as the headwind for the quarter.

Estimate Revisions Show Potency

Over the last 7 days, the Zacks Consensus Estimate for 2013 remained stable at 68 cents per share. For 2014, the Zacks Consensus Estimate advanced 1.2% to 83 cents per share.

Other investment brokers worth considering include Ladenburg Thalmann Financial Services Inc. (LTS) with a Zacks Rank #1 (Strong Buy), while Evercore Partners Inc. (EVR) and Greenhill & Co., Inc. (GHL) carry a Zacks Rank #2.

Read the Full Research Report on ETFC
Read the Full Research Report on LTS
Read the Full Research Report on EVR
Read the Full Research Report on GHL

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