TD (TSX:TD) Cowen has sustained its Hold rating on Nasdaq (NASDAQ: NDAQ) with a price target of $83.00.
Following the release of Nasdaq's September volumes and third-quarter 2024 statistics after the market closed on Monday, the firm's outlook on the stock remains guarded.
The data indicated that Average Daily Volume (ADV) exceeded expectations, with year-over-year comparisons generally viewed positively. This performance suggests a potential increase in the firm's revenue forecast for the third quarter of 2024.
TD Cowen's analysis highlighted a preference for Intercontinental Exchange (NYSE:ICE) on October 3 and Tradeweb Markets (NASDAQ:TW) on October 4, indicating a more favorable view of these companies over Nasdaq. Despite the favorable data, the firm decided not to alter its stance on Nasdaq, reiterating the Hold rating it had previously set.
In other recent news, Nasdaq OMX Group Inc. has reported its trading volumes for September and Q3 2024, showing a year-over-year increase in US equity options volumes by 13% and a contrasting downturn in European options and futures contracts.
Nasdaq has also undergone significant changes in its revenue accounting for AxiomSL contracts, resulting in a one-time, non-cash GAAP revenue reduction of $32 million in Q3 2024. Among recent leadership changes, Stephanie Champion was appointed as the new Executive Vice President and Head of Nasdaq Verafin.
RBC (TSX:RY) Capital Markets and Oppenheimer have both maintained an Outperform rating on Nasdaq, with RBC setting a price target of $88.00 and Oppenheimer raising the price target to $80.00. Citi, however, has maintained a Neutral rating on Nasdaq.
Nasdaq has also agreed to pay $22 million to settle charges with the U.S. Commodity Futures Trading Commission related to undisclosed incentive programs and filed with the Securities and Exchange Commission to launch Nasdaq Bitcoin Index Options.
InvestingPro Insights
To complement TD Cowen's analysis, recent data from InvestingPro offers additional context on Nasdaq's financial position. The company's market capitalization stands at $40.82 billion, reflecting its significant presence in the financial markets. Nasdaq's P/E ratio of 40.91 suggests that investors are willing to pay a premium for its earnings, which aligns with the company's strong market position and recent performance.
InvestingPro Tips highlight that Nasdaq has raised its dividend for 12 consecutive years, demonstrating a commitment to shareholder returns. This consistent dividend growth could be attractive to income-focused investors, especially given the current dividend yield of 1.35%. Additionally, Nasdaq has shown a strong return over the last three months, with a price total return of 17.65%, which corroborates the positive trading volumes mentioned in the article.
While TD Cowen maintains a cautious Hold rating, it's worth noting that Nasdaq has been profitable over the last twelve months, with a revenue of $6.57 billion. The company's gross profit margin of 66% indicates efficient operations, which could support future growth and dividend sustainability.
For investors seeking a more comprehensive analysis, InvestingPro offers 9 additional tips that could provide deeper insights into Nasdaq's financial health and market position.
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