Citi cuts Interactive Brokers stock rating to neutral from buy

On Monday, Citi analysts downgraded Interactive Brokers Group (NASDAQ: NASDAQ:IBKR) stock rating to neutral from buy. This change comes despite the firm’s recent strong performance, including a 28% increase quarter-to-date and an impressive 72% return over the past year, according to InvestingPro data. The analysts set a new price target of $215, up from the previous $205.

Interactive Brokers has shown impressive growth, with average annualized account growth exceeding 30% over the past five months. Retail trading activity has also been robust, with monthly cleared daily average revenue trades (DARTs) averaging 3.1 million in 2025, representing a year-over-year increase of more than 40%. InvestingPro data reveals the company maintains excellent financial health with a 91% gross profit margin and strong revenue growth of 18% in the last twelve months.

The analysts noted that while the equity markets have improved since mid-April, contributing to the stock’s recent strength, the current valuation is near the upper end of its historic range. Interactive Brokers is trading at 29x, 27x, and 24x the analysts’ estimated earnings per share for 2025, 2026, and 2027, respectively. This aligns with InvestingPro’s assessment that the stock is trading at Fair Value, with additional insights available in the comprehensive Pro Research Report.

Citi analysts expressed concerns that account growth might slow in the second half of the year due to seasonal patterns. They see a balanced risk/reward at the current levels but remain positive about the company’s long-term growth prospects, citing its best-in-class account growth, geographical diversity, strong balance sheet, and profitability. The company’s solid fundamentals are reflected in its "GREAT" overall financial health score from InvestingPro, supported by consistently maintained dividend payments for 16 consecutive years.

In other recent news, Interactive Brokers Group reported significant growth in its May 2025 performance metrics, with a 43% increase in Daily Average Revenue Trades (DARTs) year-over-year, reaching 3.384 million. The firm’s client equity rose 29% from the previous year, totaling $628.2 billion. Furthermore, client margin loan balances increased by 15% compared to the same period last year, amounting to $61.2 billion. In April, the company saw a 63% increase in DARTs from the previous year, with client equity reaching $588.1 billion, marking a 28% year-over-year rise.

Additionally, Interactive Brokers expanded trading hours for its Forecast Contracts, allowing clients to trade nearly 24 hours a day, six days a week. This move aims to provide investors with greater flexibility in managing risk and market views. The company also announced the results of its annual stockholders’ meeting, with all proposals, including the election of directors and executive compensation, receiving strong approval.

Moreover, Redburn-Atlantic raised its price target for Interactive Brokers stock to $246, maintaining a Buy rating, citing the company’s robust technology platform and growth opportunities. These developments reflect Interactive Brokers’ continued efforts to enhance its services and align with shareholder interests.

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