Shares of TD Ameritrade Holding Corp. advanced Tuesday after a KBW analyst upgraded the online brokerage firm, citing its positioning to benefit from rising interest rates.
Analyst Joel Jeffrey upgraded his rating on TD Ameritrade to "outperform" from "market perform." The target price was raised to $22.50, from $21.
TD Ameritrade shares climbed 57 cents, or 3 percent, to $19.27.
In a note to investors, Jeffrey wrote that TD Ameritrade stands to benefit in the long-term from rising interest rates, which in turn should get investors focusing on company stocks that could grow as a result.
Jeffrey noted that TD Ameritrade has the largest market share in trading activity of among online brokers, generates substantial earnings and has little balance sheet risk.
A recent sell-off in TD Ameritrade shares also makes the stock price more attractive, Jeffrey noted.
Given lackluster trading volumes industrywide, however, Jeffery said he does not expect much out of TD Ameritrade's stock in the near-term.