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Tradeweb Markets: Hold Rating Amid Strong Volumes and Premium Valuation

Tradeweb Markets: Hold Rating Amid Strong Volumes and Premium Valuation

In a report released yesterday, Michael Cyprys from Morgan Stanley maintained a Hold rating on Tradeweb Markets (TWResearch Report), with a price target of $149.00.

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Michael Cyprys has given his Hold rating due to a combination of factors related to Tradeweb Markets’ recent performance and market conditions. The company reported a strong year-over-year increase in average daily volumes (ADV) for May, with a notable rise in market share for both investment-grade and high-yield credit. However, despite these positive indicators, the stock’s price has already outperformed year-to-date, and it is currently trading at a premium valuation.
While the volume strength and improved market share in U.S. credit are supportive of the stock, there are concerns about the deceleration in monthly growth and the decline in compression activity, which affects profitability. Additionally, although second-quarter volumes are tracking ahead of both Morgan Stanley estimates and consensus, the mixed performance across different segments and the premium valuation suggest a balanced risk-reward scenario, justifying the Hold rating.

TW’s price has also changed slightly for the past six months – from $136.120 to $139.860, which is a 2.75% increase.

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