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On Tuesday, BMO Capital Markets updated its outlook on TMX Group (X:CN) (OTC: TMXXF), increasing the price target from Cdn$55.00 to Cdn$57.00. The firm maintained its Outperform rating on the stock, signaling confidence in the company’s performance.
BMO Capital’s analyst highlighted TMX Group’s first-quarter achievements, noting a significant rise in derivative volumes that set a new record. This performance was underscored as evidence of TMX’s robust business model, particularly in the face of turbulent market conditions.
The analyst pointed out that TMX Group is at a pivotal moment for revenue growth. After observing a +10% organic revenue growth in 2024 and a +5% average from 2018 to 2023, the analyst anticipates more than a 20% increase in organic revenue growth for the first quarter of 2025.
Additionally, the analyst noted the strong organic growth of VettaFi, a part of TMX Group, with net flows estimated to represent an increase of +15% of assets under management (AUM). This is nearly double the +8% growth seen in 2024.
BMO Capital Markets reaffirmed TMX Group as their top pick, citing the company’s ascending organic growth trajectory and its diversified business model as key factors that could provide resilience against the backdrop of volatile markets.
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