Investing.com -- Citi Research has downgraded its rating on Euronext (EPA:ENX) to "neutral" from "buy," citing limited room for further gains after a period of strong performance and elevated trading volumes.
Analysts at Citi said Euronext has benefited from a spike in trading activity in March, fueled by market volatility tied to European Union fiscal stimulus and U.S. tariffs.
The resulting increase in volume supported first-quarter revenue and earnings growth. However, Citi said those gains are already reflected in the consensus estimates and current share price.
The firm estimates Euronext’s first-quarter 2025 revenue at €445 million, up 11% from a year earlier and in line with Visible Alpha consensus expectations.
Its underlying earnings before interest, taxes, depreciation and amortization, or EBITDA, is forecast at €280 million, also in line with consensus.
Despite the solid operating trends, analysts said valuation is now the main constraint. Euronext is trading at 18 times Citi’s 2026 earnings estimate, a level that is above its historical average range of 12 to 21 times and only modestly below Deutsche Boerse (ETR:DB1Gn) and U.S. exchange peers.
“We hence believe the volume/revenue benefit from recent volatility is already factored into consensus estimates,” Citi said. Following strong recent outperformance, Euronext no longer screens as cheap on a relative or historical basis, Citi added.
Citi also updated its full-year EBITDA forecasts. It now sees 2025 EBITDA at €1.087 billion, up from a previous estimate of 1.07 billion, and 2026 EBITDA at €1.15 billion, up slightly from 1.14 billion.
The changes reflect higher trading activity but do not alter the firm’s overall view of Euronext’s longer-term growth outlook. Citi reduced its target price to €140 from €134.