Bear Stearns upgraded Instinet Group (INGP ) to peer perform from underperform.
Analyst Daniel Goldberg says he thinks the electronic exchange has turned the corner toward profitability and growth. He believes Instinet could emerge as one of the few beneficiaries of regulatory scrutiny surrounding brokerage and asset management industries.
Goldberg says given the new legislation, the takeout cannot be ruled out. He says Instinet, with its new leaner, more segmented model, has potentially significant operating leverage; sensitivity analysis indicates 2004 earnings per share could reach 20 cents to 25 cents with a modest uptick in volume and revenue per share. For now, he maintains the 1 cent 2003 loss estimate, and the 4 cents 2004 earnings per share estimate.