Strategic Acquisition of R.J. O’Brien Positions StoneX Group for Growth and Market Leadership

Daniel Fannon, an analyst from Jefferies, maintained the Buy rating on StoneX Group (SNEX – Research Report). The associated price target is $83.00.

Daniel Fannon has given his Buy rating due to a combination of factors surrounding StoneX Group’s strategic acquisition of R.J. O’Brien. The acquisition, valued at $900 million, is expected to bring about significant synergies and enhance StoneX’s market position. By acquiring R.J. O’Brien, StoneX is poised to become the largest non-bank futures clearing merchant, which should reduce competitive pressures and improve its client acquisition and broker recruitment capabilities.
Additionally, the acquisition is anticipated to be financially beneficial, with management targeting double-digit earnings per share accretion and return on equity expansion. The deal is expected to be funded through a combination of debt and equity, maintaining a manageable debt-to-EBITDA ratio. Furthermore, R.J. O’Brien’s strength in interest rate hedging and its introducing broker presence are expected to complement StoneX’s existing offerings, potentially unlocking new revenue opportunities. These strategic and financial benefits underpin Fannon’s positive outlook on StoneX Group’s stock.