Taking a Closer Look at MarketAxess' (MKTX) 9.8% 2-Day Rally
MarketAxess Holdings Inc. MKTX shares jumped 9.8% in the past couple of days as investors recognized its growth potential, thanks to bullish November trading statistics and a positive analyst move. Bond trading at the company’s platform is picking up due to lower-than-expected inflation.
Let’s delve deeper.
MarketAxess witnessed a notable 9.3% year-over-year jump in total credit average daily trading volume for November, reaching $14.3 billion. The growth was driven by solid performance across the company’s credit products. Its total credit trading volume rose to $303.3 billion.
Additionally, MKTX achieved record trading volumes in Eurobonds, reaching $43.7 billion, and municipal bonds, reaching $12.6 billion. With lower-than-expected inflation, rate hikes are expected to stay paused, and if the inflation figures continue to cool down, we might even see rate cuts in the coming days. In anticipation of lower rates in the future, investors are flocking to current debt securities, such as bonds, to secure high payouts now.
Also, Citigroup’s analyst, Chris Allen, raised his price target on the MarketAxess stock to $300 per share, up from the earlier figure of $270. The stock closed at $262.05 on Dec 06, 2023. Given the ongoing increase in client engagement in MKTX’s trading platforms, the company is well-poised for growth.
Enhanced trading velocity, facilitated by increased trading automation and the All-to-All Open Trading platform, is expected to contribute to the company’s improving performance. The Open Trading platform generates substantial transaction cost savings for the company.
Price Performance
MarketAxess shares have increased 15.6% in the past three months compared with the 11% rise of the industry it belongs to.
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Zacks Rank & Key Picks
MarketAxess currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Finance space are Cboe Global Markets, Inc. CBOE, Coinbase Global, Inc. COIN and Capital Southwest Corporation CSWC. While Cboe Global sports a Zacks Rank #1 (Strong Buy) now, Coinbase and Capital Southwest carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Cboe Global’s current-year earnings indicates a 9.4% year-over-year increase. It beat earnings estimates in all the past four quarters, with an average surprise of 4.1%. Also, the consensus mark for CBOE’s 2023 revenues suggests 9.8% year-over-year growth.
The Zacks Consensus Estimate for Coinbase’s current-year earnings implies a 91.7% year-over-year improvement. It has witnessed one upward estimate revision against none in the opposite direction during the past month. COIN beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 63%.
The consensus mark for Capital Southwest’s current-year earnings indicates a 16.6% year-over-year increase. It beat earnings estimates in all the past four quarters, with an average surprise of 6.6%. Furthermore, the consensus estimate for CSWC’s 2023 revenues suggests 46.4% year-over-year growth.
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