The firm said it raised its rating on the company, which provides securities brokerage services and technology-based financial services to a variety of clients, based on its belief TD Ameritrade has the best organic growth in the asset managers, broker dealers and exchanges group.
Citigroup has a $40 price target on the stock.
Separately, TheStreet Ratings team rates TD AMERITRADE HOLDING CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate TD AMERITRADE HOLDING CORP (AMTD) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, expanding profit margins, solid stock price performance and growth in earnings per share. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- AMTD's revenue growth has slightly outpaced the industry average of 5.1%. Since the same quarter one year prior, revenues rose by 12.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Capital Markets industry and the overall market, TD AMERITRADE HOLDING CORP's return on equity exceeds that of both the industry average and the S&P 500.
- 48.31% is the gross profit margin for TD AMERITRADE HOLDING CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 26.47% is above that of the industry average.
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- TD AMERITRADE HOLDING CORP has improved earnings per share by 5.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, TD AMERITRADE HOLDING CORP increased its bottom line by earning $1.42 versus $1.22 in the prior year. This year, the market expects an improvement in earnings ($1.61 versus $1.42).
- You can view the full analysis from the report here: AMTD Ratings Report