Macquarie has upgraded ASX Ltd (ASX:ASX) Ltd to Outperform, nudging its price target to $64 from $63, arguing the stock is now “cheap enough to buy” after several months of stronger trading volumes. The broker adds that CBOE’s exit from the Australian market should underpin pricing over the medium term.
“We see this as confirmation the Australian market is too small to support additional competition,” Macquarie said.
Activity metrics strengthened in October: total capital raised reached $9.4 billion, up from $3.1 billion a year earlier; cash market daily trades surged 51%; and futures and options volumes rose 17%.
Macquarie says it is “baking in the bad stuff”, modelling operating costs at the top end of guidance and adding $15 million in additional costs ahead of the ASIC inquiry slated to conclude in mid-2026.
On valuation, ASX trades at 22.1x forward earnings, which Macquarie calculates is 10.6% below its three-year average multiple of 24.8x. Even so, the stock’s premium to the ASX 100 is about 15%, well below the typical ~50% premium.
Key catalysts flagged by the broker include the monthly activity reports and the first-half result in February.