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Goldman Sachs analyst Will Nance believes that US online brokers are likely to report very strong results for 4Q on the back of the robust crypto activity and retail trading volume.
Nance expects total retail trading revenue (equity + options) at Charles Schwab (NYSE: SCHW), Interactive Brokers (NASDAQ: IBKR), and Robinhood (NASDAQ: HOOD) to be up 3%, 5%, and 6% QoQ, respectively.
Similarly, the analyst sees total crypto trading revenues at Coinbase (NASDAQ: COIN) and HOOD up 62% and 18% QoQ, respectively.
“Nevertheless, and despite a rising tide, stock performance has been heavily bifurcated, with higher multiple fintech/crypto names such as HOOD and COIN declining roughly 30% and 60% since 3Q21 earnings, SI down over 40% from recent all-time highs, and with traditional brokerages such as SCHW and IBKR rallying 26% and 5% on the back of a broader rotation into value and higher interest rate expectations. With healthy activity levels, we see solid beats across the board, with COIN, SI and HOOD putting up the strongest results relative to expectations,” Nance said in a client note.
By Senad Karaahmetovic | senad@streetinsider.com