Analyst Craig Siegenthaler of Bank of America Securities reiterated a Hold rating on CME Group (CME – Research Report), with a price target of $215.00.
Craig Siegenthaler has given his Hold rating due to a combination of factors including CME Group’s solid fourth-quarter earnings, which were bolstered by lower taxes and increased income from their clearinghouse activities. Despite these positives, there were misses on both expenses and operating income, with revenues meeting expectations. Another concern influencing the Hold rating is CME’s gradual market share loss in the energy sector to the Intercontinental Exchange since 2020, which appears to stem from energy price appreciation and a shift to more spread trading, as opposed to the CME CEO’s suggestion of random quarterly fluctuations.
Additionally, while CME has benefited from a favorable macroeconomic environment for rates, which have seen significant volume increases, this effect is anticipated to taper off as volatility decreases moving forward. Siegenthaler also notes CME’s tempered approach to price increases, which are set to impact their revenue growth rates. With consideration to the potential competition from the upcoming FMX Futures Exchange, adjustments have been made to future earnings estimates. Despite a modest upside to volume estimates and an increase in the price objective, CME’s high valuation relative to earnings expectations justifies a neutral stance on the stock.
In another report released yesterday, KBW also maintained a Hold rating on the stock with a $229.00 price target.
See today’s best-performing stocks on TipRanks >>
Based on the recent corporate insider activity of 75 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of CME in relation to earlier this year.
TipRanks tracks over 100,000 company insiders, identifying the select few who excel in timing their transactions. By upgrading to TipRanks Premium, you will gain access to this exclusive data and discover crucial insights to guide your investment decisions. Begin your TipRanks Premium journey today.
CME Group (CME) Company Description:
CME Group Inc., formerly known as Chicago Mercantile Exchange Holdings Inc, is the world’s leading derivatives marketplace, with it offering a wide range of futures and options products for risk management. These include equity indexes, interest rates, agricultural commodities, foreign exchange, energy, and metals. The company also offers clearing and settlement services for exchange-traded contracts, as well as for cleared over-the-counter derivatives transactions. It also provides a wide range of market data services such as live quotes, delayed quotes, historical data service and market reports.
Read More on CME:
