Piper Sandler cuts Interactive Brokers price target to $182

On Wednesday, Piper Sandler adjusted its outlook on Interactive Brokers Group (NASDAQ:IBKR) shares, reducing the price target to $182 from the previous $192, while maintaining an Overweight rating on the stock. According to InvestingPro data, the company, currently valued at $68.67 billion, is trading below its Fair Value, suggesting potential upside opportunity despite recent analyst adjustments. The reassessment followed Interactive Brokers’ first-quarter earnings report, which revealed an adjusted earnings per share (EPS) of $1.88, falling short of Piper Sandler’s $1.94 estimate and the consensus of $1.92.

The shortfall in the EPS forecast was attributed mainly to higher than anticipated compensation expenses, which were 6% above estimates, and a lower net interest income (NII), which was 4% below expectations. Additionally, commission and execution fees slightly missed the mark, coming in 1% lower than projected, and fixed expenses were about 3% higher than anticipated. Despite these challenges, InvestingPro analysis shows the company maintains strong fundamentals with a gross profit margin of 90.67% and impressive revenue growth of 18.69% over the last twelve months.

Despite these variances, Interactive Brokers demonstrated solid performance in certain areas. The company’s adjusted pretax margin was reported at 73.9%, marking the sixth time in the past seven quarters that this figure has exceeded 70%. Account growth was also robust, with a 33% annualized increase in the first quarter of 2025.

The report led to a revision of Piper Sandler’s earnings estimates for Interactive Brokers for the years 2025 and 2026. This revision was primarily driven by lower than expected margin loan balances for the second quarter of 2025, which have decreased by 10%-12% in April to date. InvestingPro subscribers can access additional insights, including 7 more exclusive ProTips and a comprehensive analysis of IBKR’s financial health, which currently rates as "GREAT" with an overall score of 3.4/5.

In other recent news, Interactive Brokers Group reported its first-quarter 2025 earnings, exceeding analysts’ expectations with an earnings per share (EPS) of $1.88, slightly above the forecast of $1.87. The company also outperformed revenue projections, reporting $1.43 billion compared to the anticipated $1.38 billion. Interactive Brokers achieved record quarterly net revenues and pretax income, with commissions increasing by 36% to over $500 million. The firm added 279,000 new accounts, marking a record quarter for account growth. In terms of analyst activity, BofA Securities adjusted its price target for Interactive Brokers to $243 from $265, while maintaining a Buy rating, citing concerns over the potential impact of tariff disputes on international demand for US assets.

The company announced plans for a 4-for-1 stock split and an increase in its quarterly dividend from $1 to $1.28. Despite strong earnings, there was a noted 6.71% decline in the company’s stock during aftermarket trading. Interactive Brokers continues to focus on automating brokerage operations and expanding its cryptocurrency offerings, adding seven new cryptocurrencies to its platform. Analysts from BofA Securities highlighted the company’s resilience in navigating market uncertainties, emphasizing its comprehensive global market offerings that allow clients to pivot between domestic and international assets seamlessly.

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