Canada's TMX Group Q3 revenue beats estimates driven by double-digit growth in TMX VettaFi

Overview

• Canada market operator's Q3 revenue rose 17%, beating analyst expectations

• Adjusted diluted EPS for Q3 up 21%, beating analyst expectations

• Reported diluted EPS fell 12% due to foreign exchange losses

Outlook

• Company did not provide specific financial guidance for upcoming quarters or full year in its press release

Result Drivers

• ORGANIC GROWTH - Co said organic revenue rose 11% year-over-year, driven by double-digit growth in TMX VettaFi, Derivatives Trading and Clearing, and Capital Formation

• ACQUISITIONS - Co said recent acquisitions including TMX Australia Exchange and RAFI Indices contributed $26.4 mln to Q3 revenue

• EXPENSES - Co said operating expenses rose due to higher headcount, incentive plan costs, IT spending, and costs tied to BOX Exchange LLC

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 7 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the financial & commodity market operators & service providers peer group is "buy"

• Wall Street's median 12-month price target for TMX Group Ltd is C$67.00, about 17.4% above its October 29 closing price of C$57.06

• The stock recently traded at 21 times the next 12-month earnings vs. a P/E of 18 three months ago

Reuters Recommended Reads

• Oct 29 - Canada's Aecon Q3 profit beats estimates; posts record backlog

• Oct 27 - Credit bureau TransUnion Q3 revenue meets on segment growth

• Oct 27 - AllianceBernstein Q3 adjusted EPS beats estimates

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)