UPDATE: Credit Suisse Upgrades NASDAQ OMX Group as Regulation Looks Manageable

In a report published Tuesday, Credit Suisse analyst Ashley N. Serrao upgraded the rating on NASDAQ OMX Group (NASDAQ: NDAQ) from Neutral to Outperform, and raised the price target from $40.00 to $42.00.

In the report, Credit Suisse noted, “We view recent share price weakness from concerns around regulation as a buying opportunity for a cash flow rich franchise (9% FCF Yield). We believe the regulatory overhang on NDAQ will gradually be lifted and investor focus will return to the 10%+ EPS growth over the next two years from share buybacks, technology solutions revenue growth and operating leverage from modestly higher volumes. We view the ongoing $0.16-$0.20 investment in NLX (8% of 2013 EPS) and success of Nasdaq Private Market initiatives as free options.”

NASDAQ OMX Group closed on Monday at $35.48.