Citigroup Initiates Coverage of Nasdaq; “Neutral” Rating (NDAQ)

By Staff,

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Goldman Sachs has announced that they have initiated coverage of NASDAQ OMX Group, Inc.( NDAQ ) Monday.

The firm reported that they have initiated coverage on NDAQ with a rating of "Neutral," and a price target of $25. This price suggests a 2.9% increase over the stock's current price of $24.27. The stock has been mostly flat within the past year.

An analyst from the firm noted, "while we are intrigued by NDAQ's 9X 2013E P/E, solid free cash flow yield (12%), high levels of excess cash (9% of market cap) and a recurring revenue base (70% of total), we struggle to find a catalyst for NDAQ to re-rate higher without a change in the firm's capital deployment strategy."

Citigroup reported that the $1 billion in buybacks since 2009 have not paid off. They feel that a more aggressive dividend policy would benefit the shares.

Nasdaq shares were mostly flat during premarket trading Monday.

The Bottom Line
Shares of Nasdaq OMX Group ( NDAQ ) have a 2.14% dividend yield, based on Friday's closing stock price of $24.27. The stock has technical support in the $21-$22 price area. If the shares can firm up, we see overhead resistance around the $26-$27 price levels.

NASDAQ OMX Group, Inc.( NDAQ ) is not recommended at this time, holding a DARS™ Rating of 3.3 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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This article appears in: Investing Stocks
Referenced Stocks: NDAQ

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