On Dec 28, 2015, we have issued an updated research report on E*TRADE Financial Corporation ETFC. Shares of this New York-based investment brokerage firm have been moving up since late August, depicting investors’ optimism over its balance sheet restructuring plan. Notably, the company has returned roughly 22% year to date.
We remain encouraged by success of E*TRADE’s efforts toward lowering debt burden and reducing the size of legacy loan portfolio. All these labors are expected to significantly improve the company’s balance sheet composition, thereby creating additional capacity to onboard low-cost deposits in the upcoming quarters. Further, the company targets to achieve a balance sheet size of $50 billion by early 2016.
Also, E*TRADE has been revamping its product line. The company, with introduction of brokerage products & services and enhancement of capabilities on professional trading and mobile platforms, remains focused on improving its technology space to offer better digital experience to customers. We believe the brokerage company is well positioned to meet the needs of both traders and investors going forward.
Further, driven by a solid capital position, E*TRADE is focused on returning value to its shareholders. For the first time in over eight years, the company announced a repurchase authorization of up to $800 million of its common stock in Nov 2015. We believe that as the company strengthens its overall performance, it will gradually enhance shareholders’ value with dividend payments as well.
All these positives have made analysts bullish about E*TRADE’s future prospects. Hence, over the last 60 days, the Zacks Consensus Estimate for 2015 and 2016 rose 1.8% and 3.3%, respectively.
E*TRADE currently carries a Zacks Rank #2 (Buy).
Other stocks in the investment brokerage space worth a look include TD Ameritrade Holding Corporation AMTD, The Charles Schwab Corporation SCHW and Evercore Partners Inc. EVR. All three stocks hold the same Zacks Rank as E*TRADE.
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