Jefferies upgraded Investment Technology Group (ITG) to buy from hold.
Analyst Charlotte Chamberlain says Investment Technology's monthly reports for July and August suggests its domestic electronic trading service, POSIT, is turning around, even if its two lesser margin businesses continue to decline in volumes. She thinks ITG is holding the line on price.
Chamberlain says with rival Instinet's crossing network up for sale, and ITG being fortified with $318 million cash and securities, ITG has the opportunity to buy out this one credible threat to POSIT's pre-eminence as a matching system.
She's keeping the 90 cents 2003, and $1.06 2004 earnings per share estimates. Chamberlain has a $20 12-month target.