Mizuho cuts eToro stock price target on weaker trading activity

Mizuho has reduced its price target on eToro Group (NASDAQ:ETOR) stock to $43 from $52, while keeping an Outperform rating. The stock is currently trading at $27.93, marking a 20.5% decline year-to-date and a 36% drop over the past year. Mizuho cites weak trading activity and ticket sizes as reasons for the reduction, noting a decline in both trading activity and ticket sizes from July to August.

The firm believes that consensus estimates for the third quarter and full year of 2026 are too optimistic. Mizuho has lowered its fiscal 2026 revenue estimate by around 6% and adjusted its EBITDA estimate by approximately 10%. This action reflects the lower projections. The price target reduction is based on these revised estimates.

According to InvestingPro, the stock is undervalued with a Fair Value above the current price, but analysts expect sales to decline in the current year, which aligns with Mizuho's cautious outlook. Despite these cuts, eToro continues to add users and assets to its platform. Mizuho remains optimistic about the stock despite the adjustments.

The firm believes that a lower bar heading into and after the third-quarter earnings report improves the risk-reward profile for the next-generation brokerage platform. In related news, eToro Group's second-quarter results, released on August 11, led to price target reductions from TD Cowen and Keefe, Bruyette & Woods, while also affecting Canaccord and KeyBanc. Despite these adjustments, both firms maintained a Buy rating for eToro.