MarketAxess is Tuesday's IBD Stock Of The Day, as the bond trading platform holds up during the financial and bank stocks sell-off that has dominated the market since SVB Financial crashed late last week. MKTX shares advanced Tuesday.
New York-based MarketAxess provides electronic trading of U.S. and European corporate bonds to broker-dealers and institutional clients. It operates through the Americas, Europe and Asia. Entrepreneur Richard Mitchell McVey founded the company in April, 2000. McVey serves as MarketAxess CEO.
Analysts expect MarketAxess to report first-quarter 2023 earnings next month. Wall Street forecasts MarketAxess earnings per share growing 15% to $1.97 with revenue increasing 10% to $204 million. In 2022, MKTX earnings dropped around 1.7% to $6.65 per share. However, analysts predict 2023 EPS will grow 18% to $7.82. That would be its most profitable year since 2020, according to FactSet.
On March 3, MarketAxess reported monthly credit volumes for February were up 25% year over year and 3% compared to January. MKTX had average daily credit volume of $14.4 billion, a high water mark for the company.
COO Chris Concannon said this result was due to "strong estimated market share gains" in high-yield bonds, Eurobonds and municipals.
"We believe that stronger industry volumes, estimated market share gains and a favorable macro backdrop, combined with stable average fees per million for total credit, are setting the stage for a strong 2023," Concannon said on March 3. These comments came well before SVB Financial crashed along with Signature Bank and Silvergate Financial.
In early March, Morgan Stanley analysts wrote that MarketAxess risks include "increased competition and fee compression." The analysts added that a "slower pace of electronic adoption in credit markets" could also be a risk.
MarketAxess Stock
Shares rose 2% to 371.52 in Tuesday's market trading, but were off morning highs. On Monday, MKTX stock popped 5.1%, rebounding bullishly from the 50-day moving average.
MarketAxess stock has a flat base with an official 389.67 buy point, according to MarketSmith. Investors could use a move above the March 6 high of 375.07 as an early entry. More aggressive investors could use a break above a downward-sloping trendline, using a move above Tuesday's 371.84 high as a specific entry.
The stock's relative strength line is also at its high, a bullish sign.
MarketAxess stock ranks second in IBD's Finance-Invest Bank/Brokers industry group. MKTX shares have a 93 Composite Rating out of 99. MarketAxess stock has a 94 Relative Strength Rating. The EPS Rating is 84 out of 99.
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