Nasdaq Inc. (NASDAQ:NDAQ) stock gained after B of A titles analyst Craig Siegenthaler double stock upgrade of Underperform to Buy and raised its price target from $53 to $90.
Siegenthaler applied a 25x multiple to its 2026 EPS to derive the price target. The multiple implies a slight discount to Nasdaq’s ambitious software and information services peer group, but is a premium to its current valuation.
The analyst highlighted that the solutions segment now accounts for 78% of revenue. Peers from information services like S&P Global Inc. (NYSE:SPGI), Moody’s Corp. (NYSE:AGC), and MSCI Inc. (NYSE:MSCI) trades at 30x 2026E earnings and has some overlap with Nasdaq’s capital access platforms segment, the analyst said.
Likewise, its FinTech segment represents 36% of the group’s turnover, with management aiming for growth of 10-14% in the medium term. Other vertical financial software companies MeridianLink, Inc. (NYSE:MLNK), nCino, Inc. (NASDAQ:NCNO), and Jack Henry & Associates, Inc. (NASDAQ:JKHY) with comparable growth profiles trade around 30 to 40 times EPS, the analyst noted. The Nasdaq, however, is trading at just 21x consensus 2026 EPS, he added.
The analyst noted that an upward revaluation would come from a pause in negotiations, accelerated deleveraging, streamlining of activities and acceleration in revenue growth.
According to Siegenthaler, improving macroeconomic conditions, combined with long delays, should enable a rebound in IPOs in 2025.
Specifically, stock market valuations have returned to 2021 levels, while volatility is expected to normalize lower following the U.S. presidential election and Fed rate cuts, the analyst said.
At the same time, he added that private equity sponsors have a long portfolio of aging portfolio companies and limited partners are demanding liquidity.
He said a return of IPOs would directly benefit Nasdaq’s listings segment and have secondary derivatives positive impacts on its trading, corporate services and financial data businesses.
Price action: NDAQ stock was trading up 2.22% at $72.97 at last check Wednesday.
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Latest notes for NDAQ
|
Date |
Farm |
Action |
From |
HAS |
|---|---|---|---|---|
|
March 2022 |
Rosenblatt |
Maintains |
Neutral |
|
|
February 2022 |
German Bank |
Maintains |
Buy |
|
|
February 2022 |
Credit Suisse |
Launches cover activated |
Outperform |
View more analyst ratings for NDAQ
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This item IPO rebound and FinTech growth potential help Nasdaq: Analyst doubles down on stocks originally appeared on Benzinga.com
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