On Tuesday, Citi analyst Chris Allen increased the price target on Marex Group PLC (NASDAQ:MRX) shares to $39.00, up from $36.00, while reiterating a Buy rating on the stock. The adjustment reflects the analyst's revised estimates based on the current market environment.
Allen noted that in the fourth quarter of 2024, industry volumes across products were stronger than anticipated. Most key asset classes maintained stable volumes compared to the third quarter of 2024.
This performance leads Citi to believe that Marex Group could surpass its adjusted operating profit guidance for the fiscal year 2024, which is set at $300-305 million. The firm is currently projecting an adjusted operating profit of $310 million for Marex Group.
Looking forward, the analyst remains positive about the volume outlook and the potential for market volatility to contribute positively to Marex Group's revenue growth. Allen also mentioned that the current trajectory of interest rates could mean that their net interest income (NII) forecasts might be on the conservative side.
Citi's continued endorsement of Marex Group's stock is based on several factors.
These include the company's strong niche positioning, which offers clear potential for market share gains across its businesses, and its leverage to the energy and commodities sectors. Additionally, Marex Group's regional expansion opportunities and focus on commercial clients are seen as positive.
The expected benefits from the company's recent acquisitions of Aarna and Hamilton Court, which are anticipated to close in the first quarter of 2025 and contribute approximately 10% to the total profit after, also support the positive outlook. Citi reiterates its Buy/High Risk rating for Marex Group PLC.
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