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CME Group (CME) to Shut Down European Trading Platform
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CME Group Inc. (CME - Free Report) recently announced plans to shut down London-based derivatives exchange and clearing house, CME Europe and CME Clearing Europe, by the end of this year. The business move was driven by customers’ preference to trade more via CME Group’s U.S. platform.
According to CME Group, average volumes were more than 2.6 million contracts per day from European clients in 2016. Also, the company considers Europe to be an important and expanding market for growth. However, due to customers’ inclination toward the U.S. platform, the company decided to wind down operations in Europe. Nonetheless, CME Group will continue to have considerable operations in London as the region is an important part of the company’s global growth strategy. CME Group will also continue to cater to its European client base, developing innovative products and services, as well as helping customers effectively manage risk across every major asset class.
CME Group’s organic growth remained strong, as reflected by its revenue growth story in the past with a CAGR of 7.5% over the last three years (2014–2016). Fundamental growth continues to support the improvement in the company’s operating leverage. Efforts to expand and cross-sell through strategic alliances, acquisitions, new product initiatives and global presence should drive growth. The expected long-term earnings growth is currently pegged at 10%.
Year to date, CME Group shares have gained 1.06%, underperforming the 5.31% increase for the Zacks categorized Securities Exchanges industry. Also, the stock has been witnessing downward revisions in estimates over the last seven days.
However, our proven model conclusively states that the company will beat earnings when it reports first-quarter results on Apr 27, before the market opens. This is because the company has a favorable Zacks Rank #3 (Hold) and an Earnings ESP of +0.84%. The Zacks Consensus Estimate for the first quarter is pegged at $1.19 on revenues of $932 million, which translates to a year-over-year increase of 3.6% for the top line but 0.2% decline for the bottom line.
Stocks to Consider
Some better-ranked stocks from the finance sector are CBOE Holdings Inc. (CBOE - Free Report) , Progressive Corp (PGR - Free Report) and American Financial Group, Inc. (AFG - Free Report) .
American Financial Group engages primarily in property and casualty (P&C) insurance with focus on specialized commercial products for businesses. Shares of the company gained 7.07% year to date. The stock flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Progressive offers personal and commercial P&C insurance, and other specialty P&C insurance and related services, primarily in the U.S. Shares of the company gained 10.65% year to date. The stock flaunts a Zacks Rank #1.
CBOE Holdings is a leading derivative exchange in the U.S. Shares of the company gained 10.34% year to date. The stock holds a Zacks Rank #2.
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>
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CME Group (CME) to Shut Down European Trading Platform
CME Group Inc. (CME - Free Report) recently announced plans to shut down London-based derivatives exchange and clearing house, CME Europe and CME Clearing Europe, by the end of this year. The business move was driven by customers’ preference to trade more via CME Group’s U.S. platform.
According to CME Group, average volumes were more than 2.6 million contracts per day from European clients in 2016. Also, the company considers Europe to be an important and expanding market for growth. However, due to customers’ inclination toward the U.S. platform, the company decided to wind down operations in Europe. Nonetheless, CME Group will continue to have considerable operations in London as the region is an important part of the company’s global growth strategy. CME Group will also continue to cater to its European client base, developing innovative products and services, as well as helping customers effectively manage risk across every major asset class.
CME Group’s organic growth remained strong, as reflected by its revenue growth story in the past with a CAGR of 7.5% over the last three years (2014–2016). Fundamental growth continues to support the improvement in the company’s operating leverage. Efforts to expand and cross-sell through strategic alliances, acquisitions, new product initiatives and global presence should drive growth. The expected long-term earnings growth is currently pegged at 10%.
Year to date, CME Group shares have gained 1.06%, underperforming the 5.31% increase for the Zacks categorized Securities Exchanges industry. Also, the stock has been witnessing downward revisions in estimates over the last seven days.
However, our proven model conclusively states that the company will beat earnings when it reports first-quarter results on Apr 27, before the market opens. This is because the company has a favorable Zacks Rank #3 (Hold) and an Earnings ESP of +0.84%. The Zacks Consensus Estimate for the first quarter is pegged at $1.19 on revenues of $932 million, which translates to a year-over-year increase of 3.6% for the top line but 0.2% decline for the bottom line.
Stocks to Consider
Some better-ranked stocks from the finance sector are CBOE Holdings Inc. (CBOE - Free Report) , Progressive Corp (PGR - Free Report) and American Financial Group, Inc. (AFG - Free Report) .
American Financial Group engages primarily in property and casualty (P&C) insurance with focus on specialized commercial products for businesses. Shares of the company gained 7.07% year to date. The stock flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Progressive offers personal and commercial P&C insurance, and other specialty P&C insurance and related services, primarily in the U.S. Shares of the company gained 10.65% year to date. The stock flaunts a Zacks Rank #1.
CBOE Holdings is a leading derivative exchange in the U.S. Shares of the company gained 10.34% year to date. The stock holds a Zacks Rank #2.
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>