Financial services company Marex Group could see more than 70% from here, due to its momentous growth rate, according to Goldman Sachs. The firm initiated coverage of London-based Marex Group, a global broker-dealer and commodities market maker, on Monday with a buy rating and a $33 per share price target. Goldman’s forecast implies a roughly 73% rally from Friday’s closing price of $19.08 a share. Goldman highlighted Marex Group’s “robust” revenue clip, which has seen the company notch a compound annual growth rate, or CAGR, of more than 40% from 2020 to 2023. About half the growth came from acquisitions, while the rest came from organic growth and share gains, according to Goldman analyst Alexander Blostein. MRX YTD mountain Marex Group stock. He forecasts Marex Group will see a revenue CAGR from 2023 to 2026 of 12.3%, while its earnings CAGR is expected to expand 18% during the same period. Catalysts behind this growth include strong industry volumes and tailwinds for the Futures Commission Merchants market. So-called FCMs include individuals and companies that solicit or accept transaction orders for commodities for future delivery. Marex Group debuted on the Nasdaq in late April, priced initially at $19 a share. The stock’s performance has been tepid since then, as Friday’s close reflects an increase of less than 0.5% from that offering price. The company maintains a sturdy presence in Europe, with the bulk of its clients being consumers, large and small banks, asset managers and hedge funds. “As one of the largest non-bank Futures Commission Merchants (FCMs), MRX benefits from growth in futures markets and a declining number of FCMs, creating a favorable supply/demand dynamic for the firm,” Blostein said. “Regulatory pressures on banks create additional balance sheet constraints for the industry, potentially driving further revenue opportunities for MRX.” The analyst also listed the potential for additional acquisitions as a tailwind for Marex Group, given that the FCM industry is rife with company investments and additions. “MRX operates in a fragmented industry with many sub-scale competitors and a long history of successful acquisitions,” Blostein said. “We expect MRX will remain acquisitive (targeting > 20% ROE [return on equity] for acquired businesses), but we do not include deals in our estimates.”
