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What Could Affect Interactive Brokers Group in Q2?

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Earnings expectations

In the first quarter, Interactive Brokers (IBKR) exceeded analysts’ EPS and revenue expectations, like peers (VFH) Charles Schwab (SCHW) and E*TRADE Financial (ETFC). Meanwhile, competitor TD Ameritrade (AMTD) missed analysts’ EPS estimate but beat their revenue estimate.

In the second quarter, analysts expect Interactive Brokers to report EPS of $0.54, reflecting a YoY (year-over-year) increase. Their high estimate is $0.56, and their low estimate is $0.51. In April, a strong earnings season reduced volatility, which may have reduced brokerage clients’ trading activity.

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Revenue expectations

In the second quarter, analysts expect Interactive Brokers’ revenue to rise YoY to $469.9 million. Their high estimate is $473 million, and their low estimate is $463 million. However, volatility falling sequentially during the quarter may have limited Interactive Brokers’ commission revenue.

However, May brought volatility, which may have boosted metrics. As the Fed is expected to hike rates at its June meeting, brokerages may attract market participants’ attention as brokerages benefit from higher interest rates through higher interest income.

The Fed is expected to increase rates one more time after the hike anticipated in June. In the next article, we’ll look at analysts’ ratings for Interactive Brokers.

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