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Why Hold is an Apt Strategy for Cboe Global (CBOE) Stock Now
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Cboe Global Markets’ (CBOE - Free Report) increased medium-term target, strong market position, global reach, strength in its proprietary products, solid capital position, effective capital deployment along with favorable growth estimates make it worth retaining in one’s portfolio.
CBOE has a decent track record of beating earnings estimates in the last five quarters. It has a VGM Score of B.
Zacks Rank & Price Performance
Cboe Global currently carries a Zacks Rank #3 (Hold). Year to date, the stock has lost 14.2% compared with the industry’s decrease of 30.9%.
Image Source: Zacks Investment Research
Growth Projections
The Zacks Consensus Estimate for Cboe Global’s 2022 earnings is pegged at $6.31, indicating a 4.3% increase from the year-ago reported figure on 8.9% higher revenues of $1.6 billion. The consensus estimate for 2023 earnings is pegged at $6.56, indicating a 4% increase from the year-ago reported figure on 5.2% higher revenues of $1.7 billion.
ROE was 18.9% in the trailing twelve months, better than the industry average of 13.5%.
Estimate Revision
The Zacks Consensus Estimate for 2022 has moved north by 1.4% while the consensus estimate for 2023 has moved 0.6% in the past 30 days, reflecting analyst optimism.
Business Tailwinds
CBOE Global’s growth strategy revolves around expanding its product, broadening its geographic reach to the highest value markets, diversifying its business mix with recurring revenues, ramping up growth with recurring non-transaction revenues and leveraging technology.
CBOE Global expects to deliver total net revenue growth of 5-7% annually. Cboe Global expects organic net revenues from Data and Access Solutions to increase approximately 8% to 11% in 2022 from a base of $419 million in 2021, up from the earlier guidance of 7% to 10%. For the mid-to long term, CBOE estimates organic top line compounded average growth of 4% to 6%.
Cboe Global Markets boasts a compelling inorganic growth story. While the acquisition of Bats Global expanded and diversified its portfolio, MATCHNow helped it venture into Canada. BIDS Trading provided a meaningful presence in the substantial off-exchange segment of the U.S. equities market, while Chi-X Asia Pacific Holdings expanded its global equities business into the Asia Pacific region. Cboe Global Markets anticipates acquisitions held less than a year to add 2% to 3% to total net revenue growth in 2022, up from the prior guidance of 1% to 3%.
Being the largest stock exchange operator by volume in the United States and a leading market globally for ETP trading, CBOE also remains focused on accelerating non-transaction revenue growth.
Effective Capital Deployment
Cboe Global Markets enjoys a strong liquidity position that helps ineffective capital deployment. CBOE has hiked its dividend each year since its IPO and increased the same for 11 consecutive years. Also, as of Mar 31, 2022, CBOE had $248.9 million remaining under its existing share repurchase authorization.
W.R. Berkley’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 27.08%. In the past year, W.R. Berkley's stock has increased 36.2%.
The Zacks Consensus Estimate for WRB’s 2022 and 2023 earnings has moved 6.3% and 6.2% north, respectively, in the past 60 days.
RLI has a solid track record of beating earnings estimates in each of the last seven quarters. In the past year, RLI stock has increased 13.9%.
The Zacks Consensus Estimate for RLI’s 2022 and 2023 earnings per share is pegged at $4.35 and $4.45, indicating year-over-year increases of 12.4% and 2.3%, respectively.
The Zacks Consensus Estimate for HCI Group’s 2022 and 2023 earnings has moved 33.3% and 40% north, respectively, in the past 30 days. In the past year, HCI Group stock has lost 14.3%.
The Zacks Consensus Estimate for 2022 and 2023 earnings per share indicates year-over-year increases of 280.9% and 75%, respectively.
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Why Hold is an Apt Strategy for Cboe Global (CBOE) Stock Now
Cboe Global Markets’ (CBOE - Free Report) increased medium-term target, strong market position, global reach, strength in its proprietary products, solid capital position, effective capital deployment along with favorable growth estimates make it worth retaining in one’s portfolio.
CBOE has a decent track record of beating earnings estimates in the last five quarters. It has a VGM Score of B.
Zacks Rank & Price Performance
Cboe Global currently carries a Zacks Rank #3 (Hold). Year to date, the stock has lost 14.2% compared with the industry’s decrease of 30.9%.
Image Source: Zacks Investment Research
Growth Projections
The Zacks Consensus Estimate for Cboe Global’s 2022 earnings is pegged at $6.31, indicating a 4.3% increase from the year-ago reported figure on 8.9% higher revenues of $1.6 billion. The consensus estimate for 2023 earnings is pegged at $6.56, indicating a 4% increase from the year-ago reported figure on 5.2% higher revenues of $1.7 billion.
It has a Growth Score of A.
Return on Equity (ROE)
ROE was 18.9% in the trailing twelve months, better than the industry average of 13.5%.
Estimate Revision
The Zacks Consensus Estimate for 2022 has moved north by 1.4% while the consensus estimate for 2023 has moved 0.6% in the past 30 days, reflecting analyst optimism.
Business Tailwinds
CBOE Global’s growth strategy revolves around expanding its product, broadening its geographic reach to the highest value markets, diversifying its business mix with recurring revenues, ramping up growth with recurring non-transaction revenues and leveraging technology.
CBOE Global expects to deliver total net revenue growth of 5-7% annually. Cboe Global expects organic net revenues from Data and Access Solutions to increase approximately 8% to 11% in 2022 from a base of $419 million in 2021, up from the earlier guidance of 7% to 10%. For the mid-to long term, CBOE estimates organic top line compounded average growth of 4% to 6%.
Cboe Global Markets boasts a compelling inorganic growth story. While the acquisition of Bats Global expanded and diversified its portfolio, MATCHNow helped it venture into Canada. BIDS Trading provided a meaningful presence in the substantial off-exchange segment of the U.S. equities market, while Chi-X Asia Pacific Holdings expanded its global equities business into the Asia Pacific region. Cboe Global Markets anticipates acquisitions held less than a year to add 2% to 3% to total net revenue growth in 2022, up from the prior guidance of 1% to 3%.
Being the largest stock exchange operator by volume in the United States and a leading market globally for ETP trading, CBOE also remains focused on accelerating non-transaction revenue growth.
Effective Capital Deployment
Cboe Global Markets enjoys a strong liquidity position that helps ineffective capital deployment. CBOE has hiked its dividend each year since its IPO and increased the same for 11 consecutive years. Also, as of Mar 31, 2022, CBOE had $248.9 million remaining under its existing share repurchase authorization.
Stocks to Consider
Some top-ranked stocks from the finance sector are W.R. Berkley Corporation (WRB - Free Report) , RLI Corp. (RLI - Free Report) and HCI Group, Inc. (HCI - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
W.R. Berkley’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 27.08%. In the past year, W.R. Berkley's stock has increased 36.2%.
The Zacks Consensus Estimate for WRB’s 2022 and 2023 earnings has moved 6.3% and 6.2% north, respectively, in the past 60 days.
RLI has a solid track record of beating earnings estimates in each of the last seven quarters. In the past year, RLI stock has increased 13.9%.
The Zacks Consensus Estimate for RLI’s 2022 and 2023 earnings per share is pegged at $4.35 and $4.45, indicating year-over-year increases of 12.4% and 2.3%, respectively.
The Zacks Consensus Estimate for HCI Group’s 2022 and 2023 earnings has moved 33.3% and 40% north, respectively, in the past 30 days. In the past year, HCI Group stock has lost 14.3%.
The Zacks Consensus Estimate for 2022 and 2023 earnings per share indicates year-over-year increases of 280.9% and 75%, respectively.