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The Zacks Analyst Blog Highlights: NYSE Euronext, IntercontinentalExchange, CBOE Holdings, MarketAxess Holdings and Autodesk

Zacks Equity Research

For Immediate Release

Chicago, IL – June 20, 2013 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include NYSE Euronext Inc. (NYX-Free Report), IntercontinentalExchange Inc. (ICE-Free Report), CBOE Holdings Inc. (CBOE-Free Report), MarketAxess Holdings Inc. (MKTX-Free Report) and Autodesk Inc. (ADSK-Free Report).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Wednesday’s Analyst Blog:

EU Confident on ICE-NYSE Deal

According to Reuters, the antitrust regulators of European Union (EU) appear to gain confidence in this $8.2 billion merger between NYSE Euronext Inc. (NYX-Free Report) and IntercontinentalExchange Inc. (ICE-Free Report).

While the deal was announced in Dec 2012, the EU regulators scrutinizing it were apprehensive regarding the anti-competitive business model of the merger. This also includes the acquisition of Europe’s second-largest derivative exchange – NYSE Liffe.

Previously in 2011, the EU regulators had rejected the merger deal between NYSE and Frankfurt-based Deutsche Boerse based on such concerns. According to them, the merger provided ample scope for a monopolistic model in the future, primarily with the fusion of NYSE Liffe and Deutsche Boerse’s Eurex derivative markets.

Hence, to alleviate these qualms, IntercontinentalExchange laid out certain discrete allowances and plans to build product committees in March this year. The company also resolved to limit its trading fees on soft commodities such as coffee, cocoa and sugar, at least for next five years. Given the modifications, the EU regulators appear to have no objection over the merger.

The EU regulators are slated to provide the final verdict by Jun 24 and are expected to give a wholehearted green signal to the merger. With the approval in EU, IntercontinentalExchange will achieve another milestone following the receipt of approval from the shareholders of both the companies early this month. These positive turn of events could lead to timely culmination of the acquisition of NYSE, which is scheduled by the end of this year.

Post-acquisition, the 220-year old NYSE will own 36% in the 12-year old IntercontinentalExchange. Moreover, the latter aims to leverage NYSE’s efficiencies and global presence productively, thereby positioning it well to tap growth opportunities and bring forth a strong competitive advantage globally.

While IntercontinentalExchange and NYSE carry a Zacks Rank #3 (Hold), other outperformers of the exchange industry include CBOE Holdings Inc. (CBOE-Free Report) and MarketAxess Holdings Inc. (MKTX-Free Report). Both these stocks carry a Zacks Rank #2 (Buy).

Autodesk Downgraded to Strong Sell

On Jun 18, 2013, Zacks Investment Research downgraded Autodesk Inc. (ADSK-Free Report) to a Zacks Rank #5 (Strong Sell).

Why the Downgrade?

The downgrade primarily reflects Autodesk’s dismal first quarter 2014 result as well as the gloomy outlook that lowered estimates. The company reported earnings (including stock based compensation) of 31 cents per share, which lagged the Zacks Consensus Estimate by 4 cents.

Revenues decreased 3.1% year over year to $570.4 million, which also failed to beat the Zacks Consensus Estimate of $586 million. Significantly, revenues declined in all regions, with Asia Pacific down 3.0% from the year-ago quarter, EMEA down 4.0% year over year and the Americas down 3% year over year in the reported quarter.

The decline in revenue base had a negative impact on margins. Gross margin contracted 160 basis points, while operating margin declined 60 bps from the year-ago quarter.

The disappointing result pushed Autodesk to revise fiscal 2014 outlook. The company  lowered its revenue growth guidance to 3.0% from 6.0% for 2013. Autodesk expects operating margins to expand 50 - 100 bps, down from the earlier forecast of a 125 - 150 bps expansion compared to fiscal 2013.

For the second quarter, Autodesk expects revenues in the range of $550.0 -$570.0 million and earnings of 39 - 44 cents per share.

The Zacks Consensus Estimate for the second quarter of 2014 declined 23.8% (10 cents) to 32 cents over the last 30 days.

The Zacks Consensus Estimate for 2014 decreased 9.0% (15 cents) to $1.52 per share over the last 30 days. The Zacks Consensus Estimate for 2014 dropped 10.5% (21 cents) to $1.79 per share over the same period.

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.


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