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E*Trade Group, Inc. rose 14 1/8 to 32 Friday after U.S. Bancorp Piper Jaffray's Stephen Franco raised earnings estimates for the company, citing "elevated trading volume levels and higher-margin loans."
Franco, managing director and senior e-finance analyst at the firm, said he now expects E*Trade to lose 15 cents a share in the first quarter, rather than the 21 cents previously estimated, on revenue of $350.7 million, instead of $296 million. He continues to rate the stock a "strong buy."
"We are now modeling for 43 percent sequential growth in transaction volume and are now estimating 190,000 trades per day for the March quarter," said Franco. "We believe this is remarkable growth when considering that E*Trade's average daily online trades rose 61.5 percent sequentially in the December quarter."
Franco also raised his estimates for discount and online broker Ameritrade Holding Corp., which gained 2 5/16 to 24 1/4 Friday.
"We do not believe that the industry's stellar results have been given enough weight consideration in current valuations," he said. "We believe that the online brokerage space remains an attractive investment opportunity with significant room for appreciation."
Franco has a "buy" rating on Ameritrade shares.
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