CME Group Poised for Earnings Release Amid Mixed Analyst Sentiments
Valued at $83.9 billion by market cap, CME Group Inc. (CME) stands as the leading derivatives marketplace globally. Based in Chicago, the derivatives exchange offers a comprehensive array of benchmark products across major asset classes. These include futures and options on interest rates, equity indexes, foreign exchange, energy, agricultural commodities, metals, weather, and real estate.
Upcoming Earnings Report Sparks Analyst Interest
The financial sector giant is set to announce its fourth-quarter results before markets open on Wednesday, Feb. 12. Analysts anticipate that CME will report a non-GAAP profit of $2.45 per share, reflecting a 3.4% increase from the $2.37 per share reported in the same quarter last year. Notably, the company has consistently outperformed Wall Street’s expectations for the past four quarters. Its adjusted EPS for the recently reported quarter soared by 19.1% year-over-year to $2.68, exceeding projections by 1.1%.
Future Earnings Growth Expected
For the full fiscal year 2024, CME is projected to achieve an adjusted EPS of $10.18, which is nearly a 9% increase from $9.34 in fiscal 2023. For fiscal 2025, earnings growth is expected to slow to a modest 1.4%, with projections at $10.32 per share.
Stock Performance Trails Market Peers
CME stock prices have risen by 14.7% over the past 52 weeks, falling short of the S&P 500 Index’s ($SPX) impressive 26.5% increase and the Financial Select Sector SPDR Fund’s (XLF) substantial 34.8% returns during the same period.
Record Results Amid Analyst Caution
CME Group’s stock saw a slight increase following the release of its outstanding Q3 results on Oct. 23. Q3 2024 was marked as the best in the company’s history, achieving record volumes, revenues, and earnings. This was also the second consecutive quarter with increased volume and open interest across all asset classes. A strong performance in clearing and transaction fees boosted CME’s total revenues by 18.4% year-over-year to $1.6 billion, surpassing Wall Street expectations. Furthermore, the company exhibited a keen focus on expense management, resulting in a 21.7% year-over-year increase in GAAP-based net income to shareholders, totaling $901.3 million.
Despite these strong results, analysts maintain a cautious outlook on the stock. CME holds a consensus “Hold” rating overall. Of the 18 analysts covering the stock, six recommend a “Strong Buy,” nine indicate a “Hold,” one suggests a “Moderate Sell,” and two advocate for a “Strong Sell.” The average price target stands at $244.71, indicating a modest 5.2% upside from current levels.
On the date of publication, Aditya Sarawgi did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data presented are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here. More news from Barchart
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
