StoneX sees 97% upside for Bullish as $4.2 billion Equiniti deal opens tokenization market

StoneX Financial on Monday initiated coverage of Bullish with a Buy rating and a $42 price target, arguing that the exchange is set to become a "toll booth" for tokenized shares if its Equiniti acquisition deal follows through.

Bullish shares were trading above $22 in early morning trading, up 2.9% on the day, according to The Block's BLSH price page. StoneX's target implies roughly 97% upside from that level, although the stock is down nearly 50% over six months.

In a note to clients, StoneX analyst Mark Palmer said the Equiniti acquisition will give Bullish a transfer agency business serving nearly 3,000 issuers, 15,000 corporate clients, and 20 million shareholders once completed.

"Every big market structure shift needs a toll booth, and BLSH is buying one," Palmer wrote. "When the deal closes, BLSH will own the transfer agent of record for ~30% of the S&P 500 and half the FTSE 100, thereby commanding the point at which a share stops being a database entry and becomes a token."

The $4.2 billion Equiniti deal includes $1.85 billion in assumed debt and about $2.35 billion in Bullish shares. Equiniti processes $500 billion in annual payments, according to the note.

The tokenization opportunity 

Palmer said Bullish could capture a bigger share of a market that is projected to grow astronomically in the coming years. Tokenized equities total about $2.1 billion onchain, against $151 trillion in global equity value. The broader tokenized asset market, meanwhile, could reach $9.4 trillion by 2030, according to projections cited in the note.

On revenue, the exchange's existing business provides a solid base, Palmer noted. Bullish's second-quarter adjusted revenue rose 62% year over year to $92.6 million. Its subscription, services and other revenue also reached a record $62.7 million, per the note.

StoneX flagged several risks to its investment thesis, including an unforeseen delay or failure of the Equiniti deal. The firm also pointed to slower tokenization adoption and competition from Nasdaq, DTCC, NYSE, Securitize, and Superstate.

Meanwhile, Bullish appointed former New York Stock Exchange President Stacey Cunningham as its president. The appointment comes as the company awaits regulatory approval for its Equiniti acquisition and expands its issuer-sponsored tokenization business across Solana, Aptos, and Ethereum.