ENX remains our top pick among EU Exchanges
We reiterate our Buy rating on ENX with a €190/share price target. It is our top pick among the EU exchanges, underpinned by both structural tailwinds and idiosyncratic earnings opportunities. Our forecasts sit at the upper end of the Street, with our 2027E EPS 18% ahead of consensus. About half of that delta is driven by the underappreciated upside from the CSD expansion, a third from stronger market volumes and the remaining c.15% from other businesses. While ENX has performed well recently (outperforming the market by 15% YTD, and 7% over the past week alone) we still see scope for material upside, driven by upgrades to consensus EPS.
Several drivers of consensus EPS upgrades in the coming 6-12 months
We are 18% above consensus 2027E EPS, and see four key drivers of material earnings upgrades over the near-to-medium term: 1) stronger cash volumes (both equity & fixed income); 2) AI-related cost saves; 3) CSD expansion; and 4) increased retail participation in Europe’s securities markets. We expect these upgrades to serve as positive catalysts for ENX’s shares and support a re-rating to its valuation multiples. In particular, we expect EPS upgrades from higher volumes at the end of Q3; we expect more colour around AI efficiencies to drive upgrades with ENX’s Q3 results; we expect CSD-related upgrades when ENX reports its FY26 results in early 2027.
Resilient positioning for an uncertain world
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 approaches a resolution). As ENX’s shares respond well to EPS upgrades, we expect a number of positive catalysts for the stock in the coming 6-12 months.
Valuation: We reiterate our Buy rating; PT: €190/share, based on DCF
ENX is our top pick among the EU exchanges. We expect ENX to benefit from a number of structural tailwinds (improving European cash equity volumes and retail participation) and idiosyncratic opportunities (e.g., the CSD expansion, French bond trading). 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 in the near-to-medium term.