NYSE Euronext, Inc.'s
) third quarter earnings breezed past the Zacks Consensus Estimate
but plunged year over year based on weak volumes and pricing across
trading venues, which led to a reduced top line and lower operating
margin. A low cash position and high debt raised the concerns of
NYSE has a bigger debt burden compared to its prime peers, which
poses a competitive threat to the fundamental growth of the
company. Higher debt and lower working capital in the first half of
2012 also impelled ratings agency S&P to downgrade its outlook
to negative from stable, in August 2012.
Our six-month target price of $22.00 equates to about 11.7x our
earnings estimate for 2012. With an annual dividend of $1.20, this
price target implies a negative total return of 6.9% over that
period. This is consistent with our long-term Underperform
recommendation on the shares.
NYSE EURONEXT (NYX): Free Stock Analysis Report
To read this article on Zacks.com click here.