Gold prices hold losses as US-EU trade deal eases safe‑haven demand
On Tuesday, Morgan Stanley (NYSE:MS) analysts adjusted their stance on Nasdaq OMX Group Inc. (NASDAQ: NDAQ), downgrading the stock from Overweight to Equal-weight and significantly reducing the price target to $74 from the previous $96. The revision reflects a guarded perspective on the company's future revenue growth, particularly within its Solutions business segment, which accounts for more than 70% of its firmwide revenues. The stock has already felt the impact, declining nearly 11% over the past week, with InvestingPro data showing the stock currently trading at $67.74, near its technical support levels.
The analysts expressed concerns over Nasdaq's Solutions business, pointing to potential challenges that may impede its growth. These challenges include extended sales cycles in corporate investor relations, governance, and anti-financial crime businesses, as well as the impact of difficult equity market conditions that could affect initial public offerings (IPOs) and listings revenues. Despite these challenges, InvestingPro data reveals the company's strong fundamentals, including a 22% revenue growth over the last twelve months and a 13-year streak of consecutive dividend increases.
The downgrade is rooted in the observation that Nasdaq has less exposure to trading revenues, which make up less than 30% of the firm's revenue. This factor, combined with the risks to the Solutions business growth outlook, has led to a more cautious near-term forecast for the company's organic growth. According to InvestingPro analysis, the stock is currently trading close to its Fair Value, with analyst targets ranging from $68 to $105, suggesting mixed opinions about its growth potential. For deeper insights into Nasdaq's valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
Morgan Stanley's analysts noted that while they view Nasdaq as a company with potential for re-rating over multiple years, the current market environment increases the risk of a growth slowdown. This risk, in turn, could limit the opportunity for an expansion of the company's valuation multiple.
The revised price target of $74 represents a significant decrease from the previous target of $96, indicating a shift in expectations for Nasdaq's stock performance in the near future.
In other recent news, Nasdaq OMX Group Inc. has experienced several noteworthy developments. The company is preparing to release its first-quarter earnings report, with Citi analysts adjusting their price target to $75, down from $84, while maintaining a Neutral rating. This revision is attributed to a mix of robust trading volumes and anticipated challenges such as longer sales cycles in its Calypso business. Meanwhile, Raymond (NSE:RYMD) James has maintained an Outperform rating on Nasdaq, citing the firm's diversified business model and potential for growth as key factors. Additionally, Moody's has upgraded Nasdaq's long-term issuer and senior unsecured debt ratings to Baa1, reflecting improved debt leverage and strong market positioning.
Nasdaq is also expanding its presence by establishing a regional headquarters in Dallas, Texas, which aligns with its strategy to deepen connections in the Southeast U.S. market. The company generates over $750 million in revenues from this region and plans further investments to enhance the financial ecosystem. Furthermore, Nasdaq has secured its leadership team with new contracts for top executives, including CEO Adena Friedman, ensuring continuity in its executive management. These agreements are aimed at maintaining stable leadership and are detailed in a recent SEC filing.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.