Morgan Stanley analyst Michael Cyprys downgraded the rating on Marketaxess Holdings to a Hold today, setting a price target of $209.00.
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Michael Cyprys’s rating is based on several factors that influence Marketaxess Holdings’ current market position. The company is experiencing increased volatility and widening credit spreads, which are expected to boost its near-term volumes and earnings. However, the outlook for credit remains benign, and this, coupled with a favorable environment for new issuances, may negatively impact Marketaxess’s market share. Additionally, the implementation of new protocols and initiatives might take longer to materialize, further affecting the company’s growth prospects.
Cyprys also notes a slower anticipated growth in revenue and earnings, with a compound annual growth rate of 8% and 9% over the next two years. Marketaxess’s shares have declined by 23% year-to-date, underperforming its peers, which have decreased by 10%. The stock is trading at 18 times its price-to-earnings ratio, representing a 12 times discount to its three-year historical average, with lower confidence in growth potential. These factors collectively contribute to the Hold rating, as newer initiatives are expected to take time to scale, and a negative mix shift could reduce capture and limit market share gains.
In another report released on November 10, KBW also maintained a Hold rating on the stock with a $198.00 price target.
Based on the recent corporate insider activity of 52 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of MKTX in relation to earlier this year.