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What's in Store for CME Group (CME) This Earnings Season?
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CME Group (CME - Free Report) is slated to report fourth-quarter 2020 results on Feb 10, before market open. The company delivered a negative earnings surprise of 2.13% in the last reported quarter.
Factors to Consider
CME Group’s fourth-quarter revenues are likely to have benefited from clearing and transaction fees, market data and information services and other revenues, strong market position and varied derivative product lines.
Increase in subscriber device counts, higher demand for CME data, higher custody fees, cash markets business acquired from NEX, higher fixed income volume and foreign exchange volume are likely to have contributed to top-line growth.
The company boasts a premier position with about 90% market share of the global futures trading and clearing services. However, given the low interest rates for an extended period of time and the economic uncertainty surrounding the COVID-19 pandemic, the Zacks Consensus Estimate for clearing and transaction fees is pegged at $866 million, indicating a decrease of 3.9% from the year-ago reported figure.
Recently, CME Group reported lower volumes for the fourth quarter as well as full-year 2020. ADV for fourth quarter was 16.2 million, down 4% attributable to lower volumes in four of the six product lines. For the full year, ADV was 19.1 million, down 1% attributable to lower volumes in two of the six product lines.
Lower compensation and benefits, technology, depreciation and amortization expenses are likely to have decreased expenses in the fourth quarter.
The Zacks Consensus Estimate for earnings per share is pegged at $1.35, indicating a decrease of nearly 11.1% from the year-ago quarter reported figure.
What the Zacks Model Says
Our proven model does not conclusively predict an earnings beat for CME Group this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case as you can see below.
Earnings ESP: CME Group has an Earnings ESP of -0.70%. This is because the Most Accurate Estimate of $1.34 is pegged lower than the Zacks Consensus Estimate of $1.35. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Equifax (EFX - Free Report) has an Earnings ESP of +1.44% and a Zacks Rank #3.
Diebold Nixdorf (DBD - Free Report) has an Earnings ESP of +1.54% and a Zacks Rank of 2.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
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What's in Store for CME Group (CME) This Earnings Season?
CME Group (CME - Free Report) is slated to report fourth-quarter 2020 results on Feb 10, before market open. The company delivered a negative earnings surprise of 2.13% in the last reported quarter.
Factors to Consider
CME Group’s fourth-quarter revenues are likely to have benefited from clearing and transaction fees, market data and information services and other revenues, strong market position and varied derivative product lines.
Increase in subscriber device counts, higher demand for CME data, higher custody fees, cash markets business acquired from NEX, higher fixed income volume and foreign exchange volume are likely to have contributed to top-line growth.
The company boasts a premier position with about 90% market share of the global futures trading and clearing services. However, given the low interest rates for an extended period of time and the economic uncertainty surrounding the COVID-19 pandemic, the Zacks Consensus Estimate for clearing and transaction fees is pegged at $866 million, indicating a decrease of 3.9% from the year-ago reported figure.
Recently, CME Group reported lower volumes for the fourth quarter as well as full-year 2020. ADV for fourth quarter was 16.2 million, down 4% attributable to lower volumes in four of the six product lines. For the full year, ADV was 19.1 million, down 1% attributable to lower volumes in two of the six product lines.
Lower compensation and benefits, technology, depreciation and amortization expenses are likely to have decreased expenses in the fourth quarter.
The Zacks Consensus Estimate for earnings per share is pegged at $1.35, indicating a decrease of nearly 11.1% from the year-ago quarter reported figure.
What the Zacks Model Says
Our proven model does not conclusively predict an earnings beat for CME Group this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case as you can see below.
Earnings ESP: CME Group has an Earnings ESP of -0.70%. This is because the Most Accurate Estimate of $1.34 is pegged lower than the Zacks Consensus Estimate of $1.35. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
CME Group Inc. Price and EPS Surprise
CME Group Inc. price-eps-surprise | CME Group Inc. Quote
Zacks Rank: CME Group currently carries a Zacks Rank of 3.
Stocks to Consider
Some finance stocks with the right combination of elements to come up with an earnings beat this time around are:
Intercontinental Exchange (ICE - Free Report) has an Earnings ESP of +0.86% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Equifax (EFX - Free Report) has an Earnings ESP of +1.44% and a Zacks Rank #3.
Diebold Nixdorf (DBD - Free Report) has an Earnings ESP of +1.54% and a Zacks Rank of 2.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>