Brokers, Asset Managers & Exchanges: 1Q26E: Following results, revising EPS for BAM BGC CG MKTX PAX VCTR

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Brokers, Asset Managers & Exchanges: 1Q26E: Following results, revising EPS for BAM BGC CG MKTX PAX VCTR

was the foremost beneficiary in our coverage

of this quarter’s geopolitical uncertainty, namely the arrest of Venezuelan President

Nicolas Maduro and the Iran war. That said, we believe the majority of the quarter’s 31%

organic revenue growth stemmed from structural factors such as market share gains and

TAM growth, particularly in energy. Following results, we are slightly lowering

2Q26/2026/2027/2028 estimates to $0.34/$1.43/$1.66/$2.01 from

$0.34/$1.45/$1.67/$2.08. With listed futures volume at CME/ICE down 32%/30% QTD

versus 1Q26, the cyclical tailwinds have receded more quickly than anticipated. We also

reduced our long-term estimates for FMX Futures volume. Amidst the volatility, traders

retreated to the futures exchange with the most liquidity (CME). This has caused FMX’s

open interest to decline 23% QTD and sets back the ramp timeline, in our view. Our PO

remains at $15 and is derived from an unchanged SOTP valuation methodology.

MKTX: US and international businesses are a tale of two cities

Last Thursday, MarketAxess (MKTX) announced adjusted EPS of $2.20, matching our

estimate. Although their market share remains challenged in the US, MKTX is achieving

much better traction in emerging markets and Europe where it largely does not have to

compete with Tradeweb and Trumid. Revenue growth outside of US credit was 20% y/y,

which compares to 12% total net revenue growth. Additionally, their growth initiatives

(RFM, portfolio trading, D2D, block trading) are posting MDD% growth in emerging

markets. Following results, we are lowering our 2Q26/2026/2027/2028 EPS estimates

to $1.73/$8.09/$8.14/$8.49 from $2.01/$8.17/$8.53/$8.98 to embed softer than