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ETFC

E-Trade

$36.69

-0.52 (-1.40%)

, AMTD

TD Ameritrade

$33.40

-0.53 (-1.56%)

08:38
10/09/19
10/09
08:38
10/09/19
08:38

Deutsche sees 'major' M&A as potential path for E-Trade, Ameritrade

Charles Schwab's (SCHW) move to cut trade commissions to zero is likely to spur business model changes at TD Ameritrade (AMTD) and E-Trade Financial (ETFC), Deutsche Bank analyst Brian Bedell tells investors in a research note. Instead of managing "persistent" revenue declines, management teams should seek to leverage their strong operating platforms and loyal customer base into a more diversified retail financial service offering that includes online banking, digital wealth management and investment advisory, argues the analyst. This may require "major" M&A for E-Trade and Ameritrade, while Schwab can likely augment its wider range of offerings organically or via smaller bolt on deals, says Bedell. He still views Ameritrade as the "most efficient acquirer" of E-Trade, but finds it no longer clear that the combination "would create a broad enough financial services offering for the new revenue paradigm." One alternative idea could be an E-Trade combination with a digital banking and wealth management platform, says the analyst, who analyzed a potential merger with Goldman Sachs (GS). Bedell also wonders if Ameritrade will eventually explore strategic alternatives or if 43% owner TD Bank (TD) will eventually seek to acquire a much larger controlling stake in the company.

ETFC

E-Trade

$36.69

-0.52 (-1.40%)

AMTD

TD Ameritrade

$33.40

-0.53 (-1.56%)

SCHW

Charles Schwab

$35.23

-0.22 (-0.62%)

  • 17

    Oct

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    Oct

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    Oct

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    Oct

ETFC E-Trade
$36.69

-0.52 (-1.40%)

10/07/19
UBSW
10/07/19
UPGRADE
Target $41
UBSW
Buy
E-Trade upgraded to Buy from Neutral at UBS
UBS analyst Brennan Hawken upgraded E-Trade Financial to Buy from Neutral with a price target of $41, down from $45. The stock closed Friday up 75c to $36.40. While the company's earnings power has "clearly been diminished" by the trading commission price cuts, its customer value proposition has improved relative to peers, Hawken tells investors in a research note. E-Trade has a leading corporate services offering and active trader platform, yet the stock is trading at a wider discount to peers than its five-year average, adds the analyst. As a result, Hawken believes the stock offers the "most compelling path to value creation among the discount brokers."
10/07/19
UBSW
10/07/19
DOWNGRADE
Target $33
UBSW
Neutral
TD Ameritrade downgraded to Neutral from Buy at UBS
UBS analyst Brennan Hawken downgraded TD Ameritrade (AMTD) to Neutral from Buy with a price target of $33, down from $40. While the earnings hit from trading commission price cuts has been reflected in TD Ameritrade shares, the stock is "very unlikely" to see a multiple recovery in the near-term given the "value destructive nature of the pricing actions," Hawken tells investors in a research note. Further, at a time of "dramatic industry upheaval," TD Ameritrade does not have a permanent CEO, adds the analyst. Hawken this morning also upgraded E-Trade Financial (ETFC) to Buy from Neutral.
10/07/19
10/07/19
UPGRADE

Fly Intel: Top five analyst upgrades
Catch up on today's top five analyst upgrades with this list compiled by The Fly: 1. Match Group (MTCH) upgraded to Buy from Neutral at Nomura Instinet and to Buy from Hold at Deutsche Bank. 2. Uber (UBER) upgraded to Buy from Neutral at Citi with analyst Itay Michaeli saying the company's upcoming Q3 results should bring an acceleration in revenue growth and swing investment sentiment more favorably. 3. Arconic (ARNC) upgraded to Overweight from Neutral at JPMorgan with analyst Seth Seifman saying he sees a "compelling" risk/reward profile following the stock's 8% decline in the past two weeks. 4. JetBlue (JBLU) upgraded to Buy from Neutral at Buckingham with analyst Daniel McKenzie saying competitive capacity looks manageable at this point, but notes that his upgrade is likely "early," given IT initiatives that don't become material to revenue until the first quarter of 2020. 5. E-Trade (ETFC) and Moody's (MCO) upgraded to Buy from Neutral at UBS. This list is just a portion of The Fly's full analyst coverage. To see The Fly's full Street Research coverage, click here.
10/09/19
JEFF
10/09/19
NO CHANGE
Target $43
JEFF
Buy
Jefferies says Schwab best positioned discount broker after commission cuts
Jefferies analyst Daniel Fannon said following last week's commission cut announcements that he views Charles Schwab (SCHW) as the best positioned discount broker to capitalize on trends in the industry toward fee-based advice and advisors going independent. Interest rates will "push around near-term profitability," but he believes Schwab's net new asset growth is poised to remain industry-leading, Fannon said. Among publicly traded companies in the space, Fannon still views E-Trade (ETFC) as the most likely M&A candidate, he added. Given the recent commission cuts, he lowered his price target on Schwab shares to $43 from $49, lowered his price target on E-Trade to $44 from $54 and cut his price target on TD Ameritrade (AMTD) to $36 from $55. Fannon has Buy ratings on the first two stocks mentioned and a Hold rating on TD Ameritrade.
AMTD TD Ameritrade
$33.40

-0.53 (-1.56%)

10/03/19
10/03/19
DOWNGRADE

Fly Intel: Top five analyst downgrades
Catch up on today's top five analyst downgrades with this list compiled by The Fly: 1. Tesla (TSLA) downgraded to Market Perform from Outperform at JMP Securities with analyst Joseph Osha saying that while the figures were not "significantly far off" from consensus, delivery unit growth was in low-single-digits with no indications of operational issues. 2. Charles Schwab (SCHW) and E-Trade (ETFC) downgraded to Market Perform from Outperform at Wells Fargo while TD Ameritrade (AMTD) was downgraded to Underperform from Outperform. 3. Teligent (TLGT) downgraded to Market Perform from Outperform at Raymond James with analyst Elliot Wilbur citing the announcement of a strategic review of assets that are non-core to the company's long-term strategy. 4. Insulet (PODD) downgraded to Neutral from Buy at Guggenheim with analyst Chris Pasquale saying while he continues to see the company being competitively well positioned, he now sees the risk/reward as less attractive. 5. Delta Air Lines (DAL) downgraded to Neutral from Buy at Buckingham. This list is just a portion of The Fly's full analyst coverage. To see The Fly's full Street Research coverage, click here.
10/04/19
RBCM
10/04/19
NO CHANGE
RBCM
Outperform
TD acquisition of Ameritrade could now be very accretive, says RBC
Valuation was a large impediment in Toronto-Dominion Bank (TD) owning 100% of TD Ameritrade (AMTD) in the past but that appears to no longer be the case, RBC Capital analyst Darko Mihelic tells investors in a research note. Ameritrade's forward consensus price-to-earnings multiple has dropped to 9.8 times, which is near historical lows, the analyst points out. He calculates that a 20% cash, 80% stock purchase would be 2.1% dilutive to his 2021 earnings estimate for TD without any assumed synergies at a purchase price of $45 per share for Ameritrade. TD only needs to find more than C$320M of synergies in 2021 for the transaction to be accretive, adds Mihelic. The analyst believes 100% ownership of TD Ameritrade makes strategic sense notes that at current valuation levels, the acquisition "could be significantly accretive to TD." Mihelic has a Sector Perform rating on Toronto-Dominion shares with a C$80 price target, down from C$82.
SCHW Charles Schwab
$35.23

-0.22 (-0.62%)

10/03/19
WELS
10/03/19
DOWNGRADE
Target $38
WELS
Market Perform
Charles Schwab downgraded to Market Perform from Outperform at Wells Fargo
Wells Fargo analyst Christopher Harris downgraded Charles Schwab to Market Perform from Outperform and lowered his price target for the shares to $38 from $50.
10/03/19
WELS
10/03/19
DOWNGRADE
WELS
Underperform
Wells Fargo downgrades E-Brokers after material commission cuts
Wells Fargo analyst Christopher Harris double downgraded TD Ameritrade (AMTD) to Underperform from Outperform and downgraded both E-Trade Financial (ETFC) and Charles Schwab (SCHW) to Market Perform from Outperform. He also reducing his rating on the Broker coverage sector to Market Weight from Overweight. Harris maintains an Underperform rating on Interactive Brokers (IBKR). While admitting he doesn't like to lower ratings a material event, namely the reduction of certain trading commission rates to zero, the analyst believes that "identifying a bull case for this group now has become very difficult." Organic growth is slowing, interest rates are declining and "significant chunks of trading revenue are going away," Harris tells investors in a research note. The only positives he sees, other than the possibility of a short-term relief rally for the stocks, are likely expense cuts and stock buybacks. However, earnings benefits from those sort of actions don't deserve a very high multiple, contends Harris. His double downgrade of TD Ameritrade reflects the company's "current worst-in-class" earnings growth profile, corporate governance "missteps," and fewer idiosyncratic drivers of upside relative to peers.

TODAY'S FREE FLY STORIES

SPY

SPDR S&P 500 ETF Trust

$299.50

0.47 (0.16%)

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S&P 500

$0.00

(0.00%)

11:47
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General news
President Trump says lifting sanctions on Turkey with ceasefire to be permanent »

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ZS

Zscaler

$41.57

0.84 (2.06%)

11:45
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Zscaler call volume above normal and directionally bullish »

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SDC

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$10.19

0.685 (7.21%)

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SmileDirectClub analyst commentary  »

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HEXO

Hexo

$2.54

-0.05 (-1.93%)

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General news
2-Yr FRN Note Auction Total Amount data reported »

2-Yr FRN Note Auction…

SAVE

Spirit Airlines

$37.33

0.08 (0.21%)

, EADSY

Airbus

$0.00

(0.00%)

11:33
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10/23
11:33
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11:33
Periodicals
Spirit Airlines near deal for as many as 100 Airbus A320 jets, Reuters says »

Spirit Airlines (SAVE) is…

SAVE

Spirit Airlines

$37.33

0.08 (0.21%)

EADSY

Airbus

$0.00

(0.00%)

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KAMN

Kaman

$58.38

-0.2 (-0.34%)

11:33
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Kaman executes long term agreement with Winglet Technology »

Kaman Composites…

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TWTR

Twitter

$38.93

0.11 (0.28%)

11:32
10/23/19
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11:32
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11:32
Earnings
Fly Intel: What to watch in Twitter earnings report »

Twitter (TWTR) is…

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ABMD

Abiomed

$175.20

4.45 (2.61%)

, ABT

Abbott

$81.49

0.95 (1.18%)

11:29
10/23/19
10/23
11:29
10/23/19
11:29
Recommendations
Trial for potential Abiomed competition pushed back a year, says Piper Jaffray »

This morning, the primary…

ABMD

Abiomed

$175.20

4.45 (2.61%)

ABT

Abbott

$81.49

0.95 (1.18%)

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HEMA

HemaCare Corp.

$0.00

(0.00%)

11:27
10/23/19
10/23
11:27
10/23/19
11:27
Periodicals
Breaking Periodicals news story on HemaCare Corp. »

HemaCare Corp. working…

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ABMD

Abiomed

$175.20

4.45 (2.61%)

, ABT

Abbott

$81.52

0.98 (1.22%)

11:27
10/23/19
10/23
11:27
10/23/19
11:27
Hot Stocks
Abiomed jumps after Abbott heart pump trial pushed back one year »

An update today on…

ABMD

Abiomed

$175.20

4.45 (2.61%)

ABT

Abbott

$81.52

0.98 (1.22%)

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MGNX

MacroGenics

$9.87

-1.17 (-10.60%)

, ZYME

Zymeworks

$30.25

-0.26 (-0.85%)

11:26
10/23/19
10/23
11:26
10/23/19
11:26
Recommendations
MacroGenics, Zymeworks analyst commentary  »

MacroGenics price target…

MGNX

MacroGenics

$9.87

-1.17 (-10.60%)

ZYME

Zymeworks

$30.25

-0.26 (-0.85%)

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TRU

TransUnion

$82.71

2.31 (2.87%)

11:26
10/23/19
10/23
11:26
10/23/19
11:26
Conference/Events
TransUnion management to meet with SunTrust »

Meetings to be held on…

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CVM

CEL-SCI

$7.35

(0.00%)

11:25
10/23/19
10/23
11:25
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11:25
Options
Cel Sci call volume above normal and directionally bullish »

Bullish option flow…

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NRCG

NRC Group

$13.00

(0.00%)

, ECOL

US Ecology

$66.75

0.245 (0.37%)

11:25
10/23/19
10/23
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Conference/Events
US Ecology to host special shareholder meeting »

Special Shareholder…

NRCG

NRC Group

$13.00

(0.00%)

ECOL

US Ecology

$66.75

0.245 (0.37%)

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SNAP

Snap

$13.24

-0.76 (-5.43%)

11:19
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Snap says DOJ, SEC no longer pursuing investigations of IPO disclosures »

In a regulatory filing…

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  • 21

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$NSD

NASDAQ Market Internals

$0.00

(0.00%)

11:17
10/23/19
10/23
11:17
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11:17
Technical Analysis
NASDAQ market internals summary »

Volume is average for…

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$NYE

NYSE Market Internals

$0.00

(0.00%)

11:16
10/23/19
10/23
11:16
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11:16
Technical Analysis
NYSE market internals summary »

Volume is average for…

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FB

Facebook

$184.34

2.07 (1.14%)

11:05
10/23/19
10/23
11:05
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11:05
Hot Stocks
Facebook shares up 1.6% as CEO testifies on Capitol Hill »

Facebook CEO Mark…

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  • 23

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CNC

Centene

$48.49

-0.28 (-0.57%)

11:05
10/23/19
10/23
11:05
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11:05
Options
Centene call volume above normal and directionally bullish »

Bullish option flow…

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D

Dominion

$83.07

0.29 (0.35%)

11:03
10/23/19
10/23
11:03
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11:03
Hot Stocks
Dominion, Smithfield Foods double investment in renewable natural gas to $500M »

Dominion Energy and…

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BA

Boeing

$345.52

8.07 (2.39%)

11:02
10/23/19
10/23
11:02
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11:02
Hot Stocks
Boeing CFO says it will take 'several quarters' to deliver parked 737 MAX jets »

CFO Greg Smith says it…

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  • 23

    Oct

BA

Boeing

$345.79

8.34 (2.47%)

11:00
10/23/19
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11:00
Hot Stocks
Breaking Hot Stocks news story on Boeing »

Boeing says studying…

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