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Investing.com -- Interactive Brokers was downgraded by Citi to "Neutral" on valuation concerns, whereas Redburn Atlantic raised its price target and reiterated a bullish stance.
Citi said the stock’s recent 28% quarter-to-date rally has brought it near the high end of its historical valuation range, trading at 29 times estimated 2025 earnings.
While the brokerage continues to view the company as a long-term winner given its “best-in-class” account growth and robust profitability, it sees limited upside in the near term.
“We continue to like the long-term fundamental growth story given IBKR’s bestin-class account growth, geographical diversity, pristine balance sheet, and healthy profitability. But at current levels, we prefer to wait for a more attractive entry point and are downgrading to Neutral,” Citi wrote in a note, lowering its price target to $215 from $210.
Redburn Atlantic maintained its "Buy" rating and lifted its price target to $246 from $190, calling Interactive Brokers (NASDAQ:IBKR) a “structurally advantaged” low-cost platform with a long growth runway.
It noted the company’s proprietary technology, high margins, and global access as key competitive strengths.
“Interactive Brokers has a competitive advantage and the most compelling growth opportunity,” analysts at Redburn said.
Despite short-term concerns such as lower trading volumes, margin balances, and potential Federal Reserve rate cuts, Redburn sees Interactive Brokers as underappreciated.
Its earnings estimates for 2025–2027 are about 8% above consensus, and the firm believes the current valuation, around 24 times 2026 normalized EPS, is “not demanding.”
Interactive Brokers has averaged over 30% annualized account growth this year and monthly trading activity is up more than 40% year-on-year, Citi noted.
Though both brokerages flagged the risk of a slowdown in the second half as seasonal factors come into play.