Analysts at UBS raised their earnings forecasts for European exchanges Euronext (ENX) and Deutsche Börse Group (DB1) for 2024-2026 by 1-2% to account for higher expected transaction activity.
The bank’s Q2 2024 earnings per share (EPS) estimate for both exchanges is 6% above consensus, “driven by higher trading earnings and NPV on DB1, as well as higher trading earnings on ENX.”
UBS said uncertainty over monetary policy between various central banks led to an acceleration in trading activity in interest rates, currencies and commodities during the second quarter of 2024. These products represent about 17% of DB1’s revenues and about 12% of Euronext ENX’s revenues.
Moreover, French President Macron’s surprise decision to hold parliamentary elections increased equity market volatility in the final three weeks of the quarter, driving trading activity in both equity index futures and spot equities.
“Given the recent increase in trading activity and volatility in recent weeks, we expect to see upward revisions to consensus earnings per share in the second quarter of ’24 for exchanges with higher exposure to transactional earnings,” UBS analysts said in a note, reiterating “buy” ratings. for both companies. companies.