On Friday, Oppenheimer maintained its positive stance on Nasdaq OMX Group Inc. (NASDAQ:NDAQ), increasing the share price target to $72 from $68 while reiterating an Outperform rating. The firm's confidence is bolstered by Nasdaq's consistent growth profile and a higher proportion of recurring revenue, which are anticipated to contribute to a significant re-rating of the stock's value.
The analyst at Oppenheimer kept the adjusted earnings per share (EPS) estimates unchanged for the first quarter of 2024, as well as for the full years of 2024 and 2025, at $0.66, $2.78, and $3.11 respectively. The revised price target is based on a 23x earnings multiple, which reflects the firm's recognition of Nasdaq's improving growth prospects.
The analyst's commentary highlighted that market sentiment towards Nasdaq has become more favorable, noting that the financial technology (Fintech), Index, and Listing segments are well-positioned given the current market backdrop. The assessment concludes that Nasdaq's valuation is particularly appealing to long-term investors.
Nasdaq is likened to other high-quality information services companies, suggesting that its business profile is competitive within the industry. The assessment by Oppenheimer indicates that the market is beginning to appreciate Nasdaq's merits, which could lead to a more favorable perception of the stock among investors.
InvestingPro Insights
As investors consider the positive outlook presented by Oppenheimer for Nasdaq OMX Group Inc. (NASDAQ:NDAQ), it's worth noting the company's financial health and market performance through the lens of InvestingPro data. With a solid market capitalization of $36.56 billion, Nasdaq trades at a high earnings multiple of 30.11, which aligns with Oppenheimer's analysis of the stock's growth prospects. The company's revenue for the last twelve months as of Q4 2023 stood at $6.064 billion, with a notable gross profit margin of 64.23%, underscoring its operational efficiency.
InvestingPro Tips further reveal that Nasdaq has a track record of raising its dividend for 12 consecutive years, emphasizing its commitment to returning value to shareholders. Additionally, while analysts anticipate a sales decline in the current year, Nasdaq has maintained dividend payments for 13 consecutive years, and the company is expected to remain profitable. For investors seeking more comprehensive insights, InvestingPro offers additional tips on Nasdaq, which can be accessed at https://www.investing.com/pro/NDAQ. Utilize the coupon code PRONEWS24 to get an extra 10% off a yearly or biyearly Pro and Pro+ subscription, and discover the 9 additional InvestingPro Tips that could inform your investment decisions.
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