Citi Upgrades TD Ameritrade, BlackRock

Citi issued a report on Asset Managers, Broker/Dealers and Exchanges Monday. The firm upgraded TD Ameritrade Holding Corp. (NYSE: AMTD) and BlackRock, Inc. (NYSE: BLK) to Buy.

Analysts led by William R. Katz noted that TD Ameritrade had “best in class organic growth, improving business mix, playable rate leverage, conservative F15 cost guidance and favorable capital management.

“With smaller players embroiled in regulatory issues, we expect investors to remain focused on proven players. Here, AMTD offers best exposure at reasonable valuation with limited EPS downside risk to another "false start" on U.S. rates cycle.”  

The firm set a $40 price target for TD Ameritrade.

For BlackRock, Katz saw a “favorable positioning to structural Asset Management shifts” becoming more pronounced with Q3 results.

Katz also forecasted a “1-2 year unique spurt of volumes that should carry forward the P/E multiple” due to greater confidence in PIMCO-related fixed income market share gain.

The report indicated that Kart felt a “greater confidence in [the] ability to hit 5 percent LT organic growth trajectory aided by ultimate recovery in equities along with superior margin flex and sustained strong buyback.”

The firm set a $385 price target for BlackRock.

TD Ameritrade closed Monday at $33.98, up 0.71 percent.

BlackRock closed at $338.80, down 0.68 percent.