Interactive Brokers (IBKR) enjoyed a big price target upgrade from a five-star analyst at UBS just as the company’s warning about stocks being in bubble territory appeared justified by a sharp correction in equity markets on Monday, January 27th.
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Top-rated analyst Brennan Hawken raised his price target on IBKR to $265 from $225, while maintaining a Buy rating on the shares after a strong earnings report last week saw the shares rally.
It’s not quite a Street high, though, as Bank of America’s five-star analyst Craig Siegenthaler raised his price target on the stock to $307.
Indeed there has been a flurry of price target upgrades after the company’s Fiscal fourth quarter results. Jefferies five-star analyst Daniel Fannon raised his outlook to $222 from the previous target of $215, and reiterated a Buy rating.
The move follows a strong beat on earnings with IBKR reporting Q4 earnings per share of $2.02, easily topping the consensus estimate of $1.84.
According to UBS, the company’s solid earnings and upbeat outlook endorses the bull thesis for companies in the capital markets sector. Indeed, Hawken also reiterated a Buy rating on Charles Schwab (SCHW) with his price target raised to $95 from $90.
IBKR Warning Comes True
However, it comes after IBKR itself issued a stark warning to investors about the elevated level of U.S. stocks and debt.
“Today is the highest level of margin we’ve ever had in our accounts,” the company said last week as it reported margin debt up 41% year-on-year, signaling a very high degree of leverage in the system that would be susceptible to any kind of correction.
A steep selloff in equity markets on Monday, sparked by fears about AI investments and China’s DeepSeek, appeared to vindicate this warning.
Is IBKR a Good Stock to Buy?
Overall, Wall Street has a Strong Buy consensus rating on IBKR, based on seven Buys and one Hold. After a 20% rally this year for the shares, the average IBKR price target of $233.63 implies over 6% upside.
