Monday, Citi analysts adjusted the price target for MarketAxess Holdings Inc. (NASDAQ: MKTX) to $300 from the previous $325, while still recommending a Buy rating for the stock.
The revision follows MarketAxess's December report, which showed a total credit average daily volume (ADV) of $12.3 billion. This figure represents a 14% sequential decrease and is flat compared to the same period last year.
Investment grade (IG) share trends met expectations, while high yield (HY) shares exceeded them. However, the expected seasonal increase in December was less pronounced than in previous years. The firm's credit fixed price model (FPM) performed slightly better than anticipated at $148, compared to $146 in November.
Despite December's results aligning with projections, concerns about negative earnings per share (EPS) revisions are putting pressure on MarketAxess's stock performance. As 2025 approaches, analysts anticipate a significant amount of issuance activity in the coming weeks, which could potentially challenge the company's market share in the near term.
Citi analysts maintain a positive outlook for MarketAxess, considering it a "show-me" stock within their exchange coverage universe. For the stock to sustain its momentum, analysts believe MarketAxess needs to either experience a substantial increase in spreads and volatility or provide clear evidence that its investments are leading to market share gains. The analysts remain optimistic about the latter but acknowledge that it will likely take time for these developments to materialize.
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