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Here's Why Hold is an Apt Strategy for CME Group (CME) Stock
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CME GroupInc. (CME - Free Report) is well-poised for growth, driven by strong global presence, diverse derivative product lines and solid liquidity.
Growth Projections
The Zacks Consensus Estimate for CME Group’s 2023 earnings is pegged at $8.46, indicating a 6.1% increase from the year-ago reported figure on 3.7% higher revenues of $5.21 billion.
The consensus estimate for 2024 earnings is pegged at $8.74, indicating a 3.3% increase from the year-ago reported figure on 4.8% higher revenues of $5.46 billion.
Northbound Estimate Revision
The Zacks Consensus Estimate for 2023 and 2024 earnings has moved 0.7% and 0.6% north, respectively, in the past seven days, reflecting analyst’s optimism.
Earnings Surprise History
CME Group has a decent earnings surprise history. It beat estimates in each of the last four quarters, the average being 2.94%.
Zacks Rank & Price Performance
CME Group currently carries a Zacks Rank #3 (Hold). In the past year, the stock has lost 21.5% compared with the industry’s decline of 24%.
Image Source: Zacks Investment Research
Business Tailwinds
CME Group has a solid market presence, with a 90% market share of the global futures trading and clearing services. Increasing electronic trading volume adds scalability and hence leverage to CME Group’s operating model.
Its clearing and transaction fees should continue to benefit from higher trading volumes, which, in turn, are driven by increased volatility. Increased adoption of a greater number of crypto assets with increased interest across the entire crypto economy should add to the upside.
Higher non-transactional revenues should boost the top line.
Banking on operational excellence, CME Group has a solid balance sheet and financial flexibility. These, in turn, support strategic growth initiatives, including organic market data growth, and new product extensions and offerings.
CME Group has an impressive dividend history. With the latest 10% increase in February 2023, the company has grown its dividend at a five-year CAGR of 8%. The dividend yield is 2.5%, better than the industry average of 1.5%, making the stock an attractive pick for yield-seeking investors.
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 16%.
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 3.1%.
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 43.2%.
The Zacks Consensus Estimate for AMK’s 2023 and 2024 earnings indicates 24.2% and 6.2% year-over-year growth, respectively.
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Here's Why Hold is an Apt Strategy for CME Group (CME) Stock
CME Group Inc. (CME - Free Report) is well-poised for growth, driven by strong global presence, diverse derivative product lines and solid liquidity.
Growth Projections
The Zacks Consensus Estimate for CME Group’s 2023 earnings is pegged at $8.46, indicating a 6.1% increase from the year-ago reported figure on 3.7% higher revenues of $5.21 billion.
The consensus estimate for 2024 earnings is pegged at $8.74, indicating a 3.3% increase from the year-ago reported figure on 4.8% higher revenues of $5.46 billion.
Northbound Estimate Revision
The Zacks Consensus Estimate for 2023 and 2024 earnings has moved 0.7% and 0.6% north, respectively, in the past seven days, reflecting analyst’s optimism.
Earnings Surprise History
CME Group has a decent earnings surprise history. It beat estimates in each of the last four quarters, the average being 2.94%.
Zacks Rank & Price Performance
CME Group currently carries a Zacks Rank #3 (Hold). In the past year, the stock has lost 21.5% compared with the industry’s decline of 24%.
Image Source: Zacks Investment Research
Business Tailwinds
CME Group has a solid market presence, with a 90% market share of the global futures trading and clearing services. Increasing electronic trading volume adds scalability and hence leverage to CME Group’s operating model.
Its clearing and transaction fees should continue to benefit from higher trading volumes, which, in turn, are driven by increased volatility. Increased adoption of a greater number of crypto assets with increased interest across the entire crypto economy should add to the upside.
Higher non-transactional revenues should boost the top line.
Banking on operational excellence, CME Group has a solid balance sheet and financial flexibility. These, in turn, support strategic growth initiatives, including organic market data growth, and new product extensions and offerings.
CME Group has an impressive dividend history. With the latest 10% increase in February 2023, the company has grown its dividend at a five-year CAGR of 8%. The dividend yield is 2.5%, better than the industry average of 1.5%, making the stock an attractive pick for yield-seeking investors.
Stocks to Consider
Some better-ranked stocks from the finance sector are Ameriprise Financial, Inc. (AMP - Free Report) , MarketAxess Holdings Inc. (MKTX - Free Report) and AssetMark Financial Holdings, Inc. (AMK - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) 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 16%.
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 3.1%.
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 43.2%.
The Zacks Consensus Estimate for AMK’s 2023 and 2024 earnings indicates 24.2% and 6.2% year-over-year growth, respectively.