JPMorgan raises Nasdaq stock price target to $95 from $88

On Thursday, JPMorgan updated its outlook on Nasdaq OMX Group Inc. (NASDAQ:NDAQ), increasing the price target to $95 from the previous $88, while reaffirming an Overweight rating on the stock. Currently trading at $81.73 with a market capitalization of $46.7 billion, Nasdaq has shown impressive momentum with a 41.8% return over the past year. The adjustment follows Nasdaq’s fourth-quarter 2024 earnings report, which showed adjusted earnings per share (EPS) of $0.76, aligning with consensus estimates from Bloomberg. InvestingPro analysis reveals 10+ additional investment insights for this stock, including key valuation metrics and growth indicators.

The company saw a year-over-year organic revenue growth of 9% in its Solutions segment for the fourth quarter of 2024, bolstered by a robust performance in the Capital Access segment, where Index revenue surged by 29%. This performance contributes to Nasdaq’s broader financial strength, including its impressive track record of maintaining and raising dividends for 13 consecutive years. However, this growth was slightly offset by a deceleration in the FinTech segment, which posted a 7% year-over-year organic revenue increase, down from the third quarter’s 10% growth rate.

Despite the mixed results, JPMorgan’s analysis pointed to a positive annual recurring revenue (ARR) increase of 12% in the FinTech segment during the fourth quarter. The firm anticipates this ARR to continue its upward trajectory within its medium-term forecast range throughout 2025, driven by a strong pipeline of client activity.

While the Capital Access segment, accounting for 42% of Nasdaq’s revenues, showed signs of sluggishness outside of Index, Data/Listings and Workflow revenues experienced modest growth of 2% and 4% year-over-year, respectively. These segments have been impacted by extended sales cycles.

JPMorgan’s commentary suggests that, with the strengthening of capital markets, there is an expectation for revenue improvement moving forward. The firm maintains a positive outlook on Nasdaq’s ability to sustain a compounding financial profile over the medium term. Trading near its 52-week high and at a P/E ratio of 48.3, InvestingPro’s Fair Value analysis suggests the stock is currently overvalued. In the near term, with the anticipation of increased capital markets activity, Nasdaq’s stock is seen as likely to perform well in a cyclical uptick environment. The analyst noted that while sentiment in capital markets can change quickly, there is confidence in the medium-term trajectory of Nasdaq’s broader business. For a comprehensive analysis of Nasdaq’s valuation and growth prospects, access the detailed Pro Research Report, available exclusively on InvestingPro.

In other recent news, Nasdaq Inc reported impressive fourth-quarter earnings, surpassing analyst expectations. The company’s financial technology segment played a significant role, contributing to a 10% increase in revenue to $1.23 billion. Additionally, Nasdaq’s index revenue saw a substantial 29% surge to $188 million, benefiting from $28 billion of net inflows in the quarter. For the full year 2024, Nasdaq reported adjusted earnings of $2.82 per share on revenue of $4.68 billion. Looking forward, the company provided non-GAAP operating expense guidance for 2025 of $2.25-$2.33 billion and a non-GAAP tax rate of 22.5-24.5%. Analysts from Raymond (NSE:RYMD) James and Citi maintained their ratings on Nasdaq’s stock, with both firms setting an $84 price target. These recent developments highlight Nasdaq’s robust financial performance and the confidence analysts have in the company’s growth trajectory, particularly within its financial technology sector.

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