Cboe Global Markets, Inc.’s ( CBOE Quick Quote CBOE - Free Report) optimistic medium-term target, strong market position, strategic acquisitions, strength in its proprietary products and prudent capital deployment make it worth retaining in one’s portfolio. Growth Projections
The Zacks Consensus Estimate for Cboe Global’s 2023 earnings per share is pegged at $7.01, indicating a 1.1% increase from the year-ago reported figure on 5.9% higher revenues of $1.84 billion.
The consensus estimate for 2024 earnings per share stands at $7.24, indicating a 3.1% increase from the year-ago reported figure on 3.4% higher revenues of $1.91 billion. Estimate Revision
The Zacks Consensus Estimate for 2023 has moved north by 0.1% in the past 30 days, reflecting analyst’s optimism.
Earnings Surprise History
CBOE has a decent earnings surprise history. It beat estimates in three of the last four quarters and missed in one with the average being 2.57%.
Return on Equity
Return on equity, a measure reflecting how efficiently a company utilizes shareholders’ money, was 21.8% in the trailing twelve months, expanded 320 basis points year over year and compared favorably with the
industry’s average of 10.3%. Zacks Rank & Price Performance
Cboe Global currently carries a Zacks Rank #3 (Hold). In the past year, the stock has gained 7.3% against the industry’s decline of 23.5%.
Image Source: Zacks Investment Research Growth Drivers
Cboe Global boasts the largest stock exchange operator by volume in the United States and a leading market for ETP trading globally. Growth strategy of the stock exchange operator 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 projects organic total net revenue growth in the range of 7-9% in 2023, which is above medium-term organic total net revenue guidance of 5-7%. In 2023, Cboe expects revenue-enhancing investments to be in the range of $28-$30 million. Cboe Global expects Data and Access Solutions organic net revenue growth in 2023 to increase by approximately 7% to 10% in 2023 in line with medium term guidance expectations. Higher logical port fees as well as physical port fees in the Options and North American Equities segments and increased proprietary market data fees are likely to drive the Data and access solutions segment. Cboe Global boasts a compelling inorganic growth story given its prudent acquisitions. The acquisitions also helped it realize revenues and cost synergies. In June 2022, it closed the buyout of Aequitas (Neo exchange) in a bid to strengthen foothold in a key capital market and to build on a comprehensive equities platform for the Canadian market. Cboe Global Markets continues to expect acquisitions held less than a year to add around 0.5% to total net revenue growth in 2023. Strong liquidity not only mitigates balance sheet risks but also paves the way for an accelerated capital deployment. Cboe Global has increased dividend by 4.2% in August 2022, marking the 12th consecutive year of dividend hike. As of Dec 31, 2022, CBOE had $217.9 million left under its current share repurchase authorizations. Stocks to Consider
Some better-ranked stocks from the finance sector are
Ameriprise Financial, Inc. ( AMP Quick Quote AMP - Free Report) , MarketAxess Holdings Inc. ( MKTX Quick Quote MKTX - Free Report) and AssetMark Financial Holdings, Inc. ( AMK Quick Quote AMK - Free Report) . While Ameriprise Financial and MarketAxess sport a Zacks #1 Rank (Strong Buy), AssetMark Financial carries a Zacks Rank #2 (Buy) at present. You can see . the complete list of today’s Zacks #1 Rank stocks here Ameriprise Financial’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average beat being 5.50%. In the past year, Ameriprise Financial has rallied 22.9%. The Zacks Consensus Estimate for AMP’s 2023 and 2024 earnings indicates 22.1% and 8.1% year-over-year growth, respectively. MarketAxess’ earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average beat being 3.79%. In the past year, MKTX has gained 3.2%. The Zacks Consensus Estimate for MKTX’s 2023 and 2024 earnings indicates 16.6% and 11.6% year-over-year growth, respectively. AssetMark Financial’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average beat being 7.95%. In the past year, AssetMark Financial has rallied 43.9%. The Zacks Consensus Estimate for AMK’s 2023 and 2024 earnings indicates 24.2% and 6.2% year-over-year growth, respectively.