UPDATE: Goldman Sachs Downgrades NASDAQ OMX Group Amid Rising Margin Risks

In a report published Tuesday, Goldman Sachs analyst Alexander Blostein downgraded NASDAQ OMX Group (NASDAQ: NDAQ) from Neutral to Sell, and lowered the price target from $30.00 to $28.00.

In the report, Goldman Sachs noted, “We downgrade NDAQ to Sell from Neutral, with a $28 12-mo. price target, 15% downside from current levels vs. 4% average downside for our universe. We believe the Street is too optimistic on the firm's operating margin outlook as NDAQ's business mix continues to shift toward lower-margin revenue streams, creating risks to 2014 and 2015 EPS estimates. Although we like NDAQ's stable revenue base and a solid FCF yield (7.5%), an outsized return of capital here is unlikely, while risks to Street estimates could pressure the stock relative to peers. Our adjusted 2013/2014/2015 EPS estimates are $2.41/$2.70/$3.20, an average 7% below the Street on recent volume and new business trends.”

NASDAQ OMX Group closed on Monday at $33.01.