TMX Group: Accelerating Growth, Rebounding Volumes, and Compelling Valuation Support Buy Rating

BMO Capital analyst Etienne Ricard maintained a Buy rating on TMX Group yesterday and set a price target of C$62.00.

Etienne Ricard has given his Buy rating due to a combination of factors tied to TMX Group’s accelerating growth profile and attractive valuation. He highlights that TMX is poised to deliver roughly mid-teens organic revenue expansion in Q4, extending a strong multi-quarter streak, driven by robust derivatives volumes and the strongest Capital Formation and Equities environment since 2021. Derivatives activity at the Montréal Exchange has surged, with contract volumes and revenue per contract both rising, supported by specific products showing particularly strong momentum. In addition, record-clearing volumes at BOX and structurally higher U.S. equity options activity provide a favorable backdrop for TMX’s derivatives franchise.

Ricard also points to a notable rebound in financing activity and cash equity trading on TMX markets, with the number of deals, capital raised, and shares traded all running well above recent and long-term averages, reinforcing the company’s revenue outlook. Despite these positive operating trends, TMX’s share price has pulled back by about one-fifth since mid‑2025, leading to what he views as an appealing risk‑return setup. His unchanged $62 target price is supported by robust earnings and free cash flow metrics and values TMX at a multiple that is consistent with, rather than at a premium to, peers that have more recurring revenue. Combined with incremental contributions from acquisitions like VettaFi and ongoing internal efficiency initiatives, these elements underpin his conviction that TMX shares offer meaningful upside from current levels, justifying a Buy recommendation.