Zacks Investment Research downgraded shares of Interactive Brokers Group, Inc. (IBKR) from NEUTRAL to UNDERPERFORM on March 14, 2013, with a target price of $13.50.
We downgrade our recommendation on Interactive Brokers to Underperform to reflect lower-than-expected earnings. Earnings missed the Zacks Consensus Estimate primarily due to deterioration in top line, partly offset by lower operating expenses. Moreover, the performance of the Market Making segment was disappointing. Interactive Brokers continues to retain a liquid balance sheet and a strong capital base. High barriers to entry further strengthen its position. Despite these positives, we remain concerned about the Market Making segment's ability to consistently generate sufficient returns to fund dividend payment. However, the company's better-than-peer positioning and technological excellence make us optimistic.
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