Nasdaq Stock Poised for Gains Amid 2024 Election Anticipation

As the 2024 U.S. presidential election nears, Nasdaq, Inc. is attracting attention from investors. A recent report highlights analysts' bullish outlook based on rising IPO activity post-election and Nasdaq's solid growth metrics, signaling potential upside for its stock price despite market volatility.

Date: 12-09-2024

AI Rating: 7

As the 2024 U.S. presidential election approaches, investors are closely monitoring various market sectors and stocks. In this report, Nasdaq, Inc. (NDAQ) emerges as a noteworthy stock potentially benefitting from upcoming election-related dynamics. Analyst Craig Siegenthaler from Bank of America Securities has double-upgraded NDAQ, citing expected increases in IPO listings post-election as a key factor for potential growth.

Nasdaq's latest fiscal performance also illustrates strong overall health. In its Q2 earnings report, Nasdaq reported revenues of $1.16 billion, reflecting a 25% growth year over year. Additionally, while adjusted EPS decreased by 3% to $0.69, it exceeded projections, indicating robust performance under challenging conditions. The solutions segment's revenue surged by 34%, which highlights growth in higher-margin areas of Nasdaq's business. This is particularly important because it suggests business diversification beyond traditional trading operations, now contributing only 19% of revenue.

Furthermore, after acquiring Adenza for $10.5 billion, Nasdaq significantly enhanced its FinTech capabilities, leading to a remarkable 79% revenue growth within that segment. This impressive figure far exceeds the company’s mid-term growth projections of 10% to 14%, thus underscoring the effectiveness of its strategic investments.

Analysts further project a dip in Nasdaq’s EPS to $2.74 in fiscal 2024, yet they anticipate a strong recovery to $3.10 in fiscal 2025. Such guidance is crucial as it indicates a rebound from any temporary setbacks and presents an eventual upward trajectory. Given Nasdaq's consistent dividend increases over 11 years and a solid payout ratio, it also shows a commitment to returning capital to shareholders while pursuing growth.

Overall, Nasdaq's recent upgrade and projected revenue growth positions it favorably as a likely beneficiary of potential strong IPO activity post-election, coupled with its transformation into higher-growth Revenue segments.

Stocks: NDAQ ICE