Nasdaq Inc (NDAQ) stock experienced a significant surge after Bank of America Securities analyst Craig Siegenthaler upgraded the stock to a Buy rating from its previous Underperform rating, and raised its price target from $53 to $90. Siegenthaler’s optimism is fueled by his belief that Nasdaq is well-positioned to benefit from a predicted resurgence in initial public offerings (IPOs) and the company’s robust performance in its solutions and fintech segments.
Siegenthaler’s price target is based on a 25x multiple applied to his 2026 earnings per share (EPS) forecast. This multiple, while slightly lower than Nasdaq’s peer group in software and information services, reflects a premium compared to its current valuation.
The analyst highlights the critical role of the solutions segment, which now represents 78% of Nasdaq’s revenue. He draws parallels between Nasdaq’s Capital Access Platforms segment and information services peers like S&P Global Inc (SPGI), Moody’s Corp (MCO), and MSCI Inc (MSCI), all of which trade at 30x 2026E earnings. Similarly, Nasdaq’s FinTech segment, accounting for 36% of group revenue, is projected to experience 10%-14% growth over the medium term. The analyst notes that other financial vertical software companies like MeridianLink, Inc (MLNK), nCino, Inc (NCNO), and Jack Henry & Associates, Inc (JKHY), exhibiting comparable growth trajectories, currently trade at valuations ranging from 30x to 40x EPS. In contrast, Nasdaq is currently trading at just 21x consensus 2026 EPS.
Siegenthaler outlines several catalysts for Nasdaq’s potential re-rating, including a pause in dealmaking activity, accelerated deleveraging, business streamlining, and an anticipated acceleration in revenue growth. He expects an IPO rebound in 2025, fueled by improving macroeconomic conditions and a backlog of companies seeking public listings. He predicts that equity market valuations will recover to 2021 levels and volatility will normalize after the U.S. presidential election and anticipated Federal Reserve rate cuts. Moreover, private equity sponsors are expected to have a significant pipeline of mature portfolio companies, with limited partners demanding liquidity. Siegenthaler argues that a resurgence in IPO activity would directly benefit Nasdaq’s listings segment and generate positive second-order effects on its trading, corporate services, and financial data businesses.
Nasdaq stock closed Wednesday trading at $72.97, up 2.22% following the analyst’s upgrade.
