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On Wednesday, Raymond (NSE:RYMD) James reiterated its Outperform rating on Nasdaq OMX Group Inc. (NASDAQ:NDAQ) with a steady price target of $84.00. The firm’s analysis highlighted ongoing healthy organic growth within Nasdaq’s Solutions Businesses, marking the third consecutive quarter at 9% organic, constant currency growth. This positive outlook aligns with InvestingPro data showing impressive revenue growth of 16.97% over the last twelve months, with the stock currently trading near its 52-week high of $83.77. Despite a sequential deceleration in Financial Technology organic revenue growth in the fourth quarter, due to a challenging year-over-year comparison, this was balanced by an acceleration in Capital Access Platforms growth. Consequently, net revenues aligned with consensus expectations.
The financial services company also surpassed Wall Street estimates for adjusted earnings per share (EPS), attributed to lower compensation expenses. This performance comes amid a backdrop of financial markets that are keenly observing corporate earnings to gauge economic health. InvestingPro analysis reveals that 8 analysts have recently revised their earnings upwards for the upcoming period, suggesting growing confidence in Nasdaq’s prospects. The company maintains a strong dividend track record, having raised distributions for 13 consecutive years.
Looking ahead, Nasdaq’s initial adjusted operating expense (opex) guidance suggests a modestly lower midpoint than current consensus expectations. This forward-looking statement by Raymond James indicates a potential for cost management that could influence future profitability. With a robust gross profit margin of 64.69% and a healthy return on equity of 11%, Nasdaq demonstrates strong operational efficiency. For deeper insights into Nasdaq’s financial health and valuation metrics, investors can access comprehensive analysis through InvestingPro’s detailed research reports.
Nasdaq’s financial results and the guidance provided are critical indicators of its operational efficiency and market positioning. The company’s ability to maintain growth in its Solutions Businesses and manage expenses effectively contributes to its overall financial health.
Investors and market participants often rely on analyst ratings and price targets to inform their investment decisions. Raymond James’ reiteration of the Outperform rating and price target for Nasdaq reflects confidence in the company’s continued growth and operational management.
In other recent news, Nasdaq Inc reported robust fourth-quarter earnings, surpassing analyst predictions. The financial technology sector played a significant role, contributing to a 10% rise in revenue to $1.23 billion, with the segment itself witnessing a 10% year-over-year increase to $438 million. 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. In terms of financial outlook for 2025, the company anticipates non-GAAP operating expenses of $2.25-$2.33 billion and a non-GAAP tax rate of 22.5-24.5%.
In other developments, Nasdaq returned $138 million to shareholders through dividends in Q4 and repurchased $181 million of senior unsecured notes. Citi analysts maintained a neutral rating on Nasdaq’s stock with an $84 price target, noting that Nasdaq’s adjusted operating expenses were slightly lower than expected, and the company benefited from an effective tax rate of 24.2%, marginally lower than Citi’s forecast. The analysts expect future discussions to focus on Nasdaq’s growth trajectory, especially in its financial technology sector.
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