UBS cuts MarketAxess price target to $295, maintains buy

On Monday, UBS analyst Alex Kramm adjusted the price target for MarketAxess Holdings Inc. (NASDAQ:MKTX) shares to $295 from the previous target of $305, while continuing to endorse the stock with a Buy rating. According to InvestingPro data, three analysts have recently revised their earnings estimates upward for the upcoming period, with analyst targets ranging from $191 to $305.

The revision follows the release of MarketAxess's March trading metrics, prompting UBS to increase its first-quarter 2025 earnings per share (EPS) forecast for the company to $1.81 from $1.71. This estimate aligns with the consensus on the Street. The adjustment reflects higher-than-anticipated credit transaction fees, with total credit volume up by 5.5% and rates volume by 4% relative to initial expectations. The company has demonstrated solid financial performance, with revenue growing 8.58% in the last twelve months and maintaining a healthy gross profit margin of 62.35%.

Despite the raised EPS estimate, UBS forecasts total revenue to remain unchanged for the first quarter, as increased credit and rates volumes are likely to be balanced out by lower pricing. The preliminary fixed price per million (FPM) for credit was found to be 2% below UBS's estimate for the quarter.

Kramm highlighted that MarketAxess's recent initiatives in portfolio and block trading likely contributed to the company's business gains, especially in emerging markets and Eurobonds. The analyst also suggested that ongoing market volatility could continue to stimulate higher activity in MarketAxess's legacy open trading solution.

UBS sees the current valuation of MarketAxess as particularly attractive, noting that it is at trough levels when compared to the S&P 500 index, which suggests a favorable investment opportunity.

In other recent news, MarketAxess Holdings Inc. reported record trading volumes for March 2025 and the first quarter ended March 31, 2025. The company's total average daily volume (ADV) for March reached $46.5 billion, a 46% increase from the previous year, with the first quarter's ADV at $42.9 billion, marking a 31% year-over-year rise. Despite these impressive figures, MarketAxess experienced a year-over-year decline in credit variable transaction fees per million due to product and protocol mix changes. Citi analyst Chris Allen maintained a Buy rating on MarketAxess, highlighting a significant year-over-year increase in total credit ADV for March, alongside a positive outlook for the company's Open Trading platform. Meanwhile, Keefe, Bruyette & Woods (KBW) adjusted their price target for MarketAxess to $225, citing a slight earnings per share beat due to higher revenues and lower expenses, while maintaining a Market Perform rating. UBS expressed confidence in MarketAxess, acknowledging the challenges posed by competition but recognizing its value in the sector's transition to electronic trading platforms. These developments underscore MarketAxess's strategic initiatives and the competitive pressures it faces in the electronic trading market.

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