Positioned for Earnings Upside & Multiple Expansion
ENX remains our top pick among EU Exchanges
We reiterate our Buy rating on ENX with a €175/share price target, and highlight it as our top pick among European exchanges, underpinned by a differentiated earnings growth profile and multiple expansion potential. Our forecasts sit at the upper end of the Street, with 2027–28E EPS 8-16% ahead of consensus, driven primarily by underappreciated upside from the CSD expansion and stronger cash equity trading revenues. We think recent weakness offers an attractive opportunity to accumulate, as we see upside through both earnings revisions and a re-rating.
We see several drivers of upward revisions to consensus EPS
We are 8-16% above consensus 2027-28E EPS, and see four key drivers of material earnings upgrades over the medium term: 1) CSD expansion; 2) stronger cash equity volumes; 3) AI-related cost saves; and 4) increased retail participation in Europe’s securities markets. We expect these upgrades to serve as positive catalysts for ENX’s shares and contribute to a re-rating in its multiple.
We see scope for a positive re-rating in the shares
ENX current trades at 16.7x. While this is 0.5 standard deviations above its historical average, we argue the shares deserve an even greater premium to its historical average, given: 1) ENX operates a more diversified business model today; 2) consensus EPS growth outlook is at four-year highs (2-std deviations above norm); 3) structural tailwinds are accelerating; and 4) ENX’s resilient positioning to geopolitics.
Resilient positioning with a number of upcoming catalysts
We think ENX is resiliently positioned, as we expect tailwinds to its business model irrespective of whether the Middle East conflict is resolved in the near term (via volatility if the conflict persists and via a rebound to European equity inflows if the conflict is resolved). Independent of geopolitics, we expect a number positive catalysts in the coming 12 months – the first being upgrades to consensus EPS at the end of Q2:26 as the QTD cash equity volumes (c.20% of ENX revenues) are running 8% above consensus.
Valuation: We reiterate our Buy rating; PT: €175/share, based on DCF
ENX is our top pick among the EU exchanges. We expect the company to benefit from a number of structural tailwinds (improving European cash equity volumes and retail participation) and idiosyncratic opportunities like the CSD expansion. We argue, amongst the EU exchanges, ENX should benefit the most from the European Savings and Investment Union (SIU), even if these measures are gradual.
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