NDAQ - Nasdaq downgraded to Neutral at Credit Suisse on valuation recession risk

Credit Suisse analyst Gautam Sawant downgraded Nasdaq ( NASDAQ: NDAQ ) to Neutral from Outperform on Wednesday, following the stock's recent outperformance relative to its exchange peers and the S&P 500.

"We believe Nasdaq's ( NDAQ ) revenue growth could be pressured in the event of a recession due to having the lowest transactional revenue mix relative to peers (25% vs. 40%+ for peers) and macroeconomic factors continuing to weigh on the company's data & technology growth trajectory," Sawant wrote in a note to clients.

The analyst also expects operating expense growth in 2023 and 2024 at 1-2% above consensus. He continues to view Nasdaq ( NDAQ ) as "well positioned for digital exhaust monetization, which will be a differentiating factor for future compounding earnings growth for our Exchange coverage group."

Sawant trims EPS estimates for 2023 to $2.72 from $2.77 and for 2024 to $2.98 from $3.05.

Nasdaq ( NDAQ ) stock has slipped 0.9% in Wednesday premarket trading.

His Neutral rating aligns with the Quant rating of Hold and diverges from the average Wall Street rating of Buy.

In the past six months, Nasdaq ( NDAQ ) stock climbed 19% compared with -10% for the S&P 500 Financial Exchanges & Data Index and -7.2% for the S&P 500 as seen in this chart.

SA contributor Leo Nelissen also sees macro challenges persisting for the company.

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