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Can CME Group (CME) Pull a Surprise this Earnings Season?
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CME Group Inc. (CME - Free Report) is set to report second-quarter 2016 results on Jul 28, before the market opens. Last quarter, the company’s earnings were in line with the Zacks Consensus Estimate. Let’s see how things are shaping up for this announcement.
Factors to be Considered this Quarter
CME Group is likely to witness an average daily volume (ADV) growth in the to-be-reported quarter, owing to improved operating leverage. Also, Globex volume, which comprises the majority of the exchange’s trading volume, is expected to grow in the second quarter.
Further, the company is likely to experience top-line growth on the back of expansion of futures products in emerging markets, non-transaction related opportunities and over-the-counter (OTC) offerings.
In addition, the consistent introduction of new benchmark futures contracts along with OTC IRS and cross-margining between CME Clearing Europe and its U.S. clearing house should boost growth.
However, currency fluctuation, interest rate volatility and limited credit availability are expected to lower customer demand. Also, intense competition might adversely affect both volume and pricing for the company.
With respect to surprise trend, the company beat estimates in three of the last four quarters with an average positive earnings surprise of 2.39%.
Our proven model does not conclusively show that CME Group is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: CME Group has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at $1.11 per share.
Zacks Rank: CME Group carries a Zacks Rank #3, which increases the predictive power of ESP. However, an Earnings ESP of 0.00% makes surprise prediction difficult.
We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies from the finance sector that you may want to consider as these have the right combination of elements to post an earnings beat this quarter:
The Allstate Corporation (ALL - Free Report) has an Earnings ESP of +1.89% and a Zacks Rank #3. The company is set to report second-quarter earnings on Aug 3.
Bats Global Markets has an Earnings ESP of +3.23% and a Zacks Rank #2. The company is slated to report second-quarter earnings on Aug 4.
Cigna Corp. (CI - Free Report) has an Earnings ESP of +1.67% and a Zacks Rank #3. The company is set to report second-quarter earnings on Aug 4.
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Can CME Group (CME) Pull a Surprise this Earnings Season?
CME Group Inc. (CME - Free Report) is set to report second-quarter 2016 results on Jul 28, before the market opens. Last quarter, the company’s earnings were in line with the Zacks Consensus Estimate. Let’s see how things are shaping up for this announcement.
Factors to be Considered this Quarter
CME Group is likely to witness an average daily volume (ADV) growth in the to-be-reported quarter, owing to improved operating leverage. Also, Globex volume, which comprises the majority of the exchange’s trading volume, is expected to grow in the second quarter.
Further, the company is likely to experience top-line growth on the back of expansion of futures products in emerging markets, non-transaction related opportunities and over-the-counter (OTC) offerings.
In addition, the consistent introduction of new benchmark futures contracts along with OTC IRS and cross-margining between CME Clearing Europe and its U.S. clearing house should boost growth.
However, currency fluctuation, interest rate volatility and limited credit availability are expected to lower customer demand. Also, intense competition might adversely affect both volume and pricing for the company.
With respect to surprise trend, the company beat estimates in three of the last four quarters with an average positive earnings surprise of 2.39%.
CME GROUP INC Price and EPS Surprise
CME GROUP INC Price and EPS Surprise | CME GROUP INC Quote
Earnings Whispers
Our proven model does not conclusively show that CME Group is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: CME Group has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at $1.11 per share.
Zacks Rank: CME Group carries a Zacks Rank #3, which increases the predictive power of ESP. However, an Earnings ESP of 0.00% makes surprise prediction difficult.
We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies from the finance sector that you may want to consider as these have the right combination of elements to post an earnings beat this quarter:
The Allstate Corporation (ALL - Free Report) has an Earnings ESP of +1.89% and a Zacks Rank #3. The company is set to report second-quarter earnings on Aug 3.
Bats Global Markets has an Earnings ESP of +3.23% and a Zacks Rank #2. The company is slated to report second-quarter earnings on Aug 4.
Cigna Corp. (CI - Free Report) has an Earnings ESP of +1.67% and a Zacks Rank #3. The company is set to report second-quarter earnings on Aug 4.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>