The ASX Ltd (ASX: ASX) share price is up 0.5% in early morning trade at $81.05.
That still leaves the listed exchange group down 13% since the closing bell on 31 December.
So, at the current ASX share price, is it a bargain or still overpriced?
For some insight into that question, we defer to Andrei Stadnik, vice president at Morgan Stanley.
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More cost pressure flagged
According to Stadnik – as reported by The Australian – at today's ASX share price the company is still "too expensive".
That's because it trades on a forward price-to-earnings (P/E) ratio of 30 times its forecast FY23 earnings compared to a forward P/E ratio of 21 times for its global competitors.
At the current price, it trades at a trailing P/E ratio of 32 times.
Stadnik expects recently strong listing volume to slow over the year, with additional headwinds from weaker interest rate futures.
Despite forecasting growth from energy derivatives, he expects earnings per share (EPS) growth for the ASX to be in the "low single percentage" range.
Regulators will also be keeping a sharp eye on the company following recent (and several historic) trading glitches as the company moves forward with replacing its CHESS platform with a blockchain-based clearing and settlement system.
All of which could throw up more headwinds for the ASX share price.
According to Stadnik (quoted by The Australian):
We think this, coupled with a tight labour market, especially in tech, will lead to further cost pressure and now expect operating expenses to rise by about 11.5% in FY22E and 11% in FY23.
Stadnik did increase his earnings estimated for FY23-24 by 2%. But that doesn't change his mind about ASX being pricey at current levels.
"Despite the recent de-rating across financials, ASX's valuation is still stretched," he said.
ASX share price snapshot
Over the past 12 months, the ASX share price has gained 13%, outpacing the 9% gains posted by the S&P/ASX 200 Index (ASX: XJO) over that same time.
At the current price, ASX shares pay a 2.8% dividend yield, fully franked.
