GLXY earns price target raise at ATB Capital

With Bitcoin flying, ATB Capital Markets analyst Martin Toner has raised his price target on Galaxy Digital Holdings (Galaxy Digital Holdings Stock Quote, Chart, News, Analysts, Financials TSX:GLXY).

On March 11, Bitcoin traded above $72,000, a new all-time high. Toner says when he launched coverage of the company late last year he felt bullish about the sector.

“When we initiated on Galaxy in December 2023, we stated that we believed the next upcycle in digital assets had begun,” he wrote. “Over the past two months, the price of Bitcoin (BTC) has seen a significant appreciation, rising nearly 64% YTD. GLXY benefits from the increase in BTC price through numerous levers, such as increased trading volume, lending activity, assets under management (AUM), and mining revenue. Another source of value creation is appreciation in GLXY’s book value, of which a significant portion is made up of digital assets held by the Company on its balance sheet.”

In a research update to clients March 11, Toner maintained his “Outpeform” rating but raised his price target on the stock from $13.00 to $17.00, implying a return of 28.6 per cent at the time of publication.

Toner thinks GLXY will post Income of $371-million on Operating Revenue of $151-million in fiscal 2023. He expects those numbers to improve to Income of $538-million on Operating Income of $363-million in fiscal 2024.

“The best proxy we have for institutional digital asset trading volumes are retail volumes, which have increased dramatically in-line with BTC prices. Anecdotal evidence from discussions with digitally native investment funds suggests activity has increased. In November, Galaxy reported that counterparty trading revenues had increased ~6x in October compared to the relatively quiet Q3/23. We expect another positive update when Galaxy reports Q4/23, and data suggests February and March could both be better than October,” the analyst added.