The E*TRADE baby will remain a solo act.
Shares of the discount broker tumbled 4% on Friday, after the company revealed that it will not be seeking a sale after all.
When Goldman Sachs
E*TRADE would have certainly looked good on TD AMERITRADE's
Unfortunately, TD AMERITRADE was probably the only suitor that really made sense. Discounting pioneer Charles Schwab
Big-name banks seemed like no-brainer candidates. Why wouldn't they want to reach out to individual investors through one of the industry's most recognizable brands? Unfortunately for Bank of America
The state of the deal
E*TRADE executed a 1-for-10 reverse split last year, catapulting its stock into the double digits. Well, it's back in the single digits again.
The good news here is that E*TRADE is profitable and growing. Analysts see the discounter earning $0.66 a share this year and $0.75 a share next year. The bad news is that Wall Street's profit target for 2012 was as high as $0.97 a share just three months ago. Estimates have also come down sharply for larger rivals TD AMERITRADE and Schwab, so this isn't an E*TRADE-centric downward revision.
The hosed-down outlooks aren't fatal, and this is an industry that can turn on a dime at the first whiff of a sustainable spike in trading activity and improving margins. When it happens, E*TRADE will be there to profit from the move all on its own.
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The Motley Fool owns shares of Citigroup, Bank of America, and Wells Fargo. Motley Fool newsletter services have recommended buying shares of Goldman Sachs and Charles Schwab. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
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