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Cboe Global (CBOE) Up 16.5% in a Year: Will the Rally Last?
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Shares of Cboe Global Markets, Inc. (CBOE - Free Report) have gained 16.5% in a year against the industry's decline of 20.7%. The Zacks S&P 500 composite decreased 7.4% in the said time frame. With a market capitalization of $14.4 billion, the average volume of shares traded in the last three months was 0.7 million.
Image Source: Zacks Investment Research
The rally was largely driven by optimistic medium-term target, strong market position, strategic acquisitions, strength in its proprietary products and prudent capital deployment.
This Zacks Rank #3 (Hold) stock has a solid track of beating earnings estimates in three of the last four quarters while missing in one, with the average being 2.57%.
Can CBOE Stock Retain the Momentum?
The Zacks Consensus Estimate for Cboe Global’s 2023 earnings per share is pegged at $7.05, indicating a 1.7% increase from the year-ago reported figure on 6.7% higher revenues of $1.86 billion. The consensus estimate for 2024 earnings per share is pegged at $7.30, indicating a 3.4% increase from the year-ago reported figure on 3.9% higher revenues of $1.93 billion.
The Zacks Consensus Estimate for both 2023 and 2024 has moved north by 0.1% in the past seven days, reflecting analyst’s optimism.
Return on equity (ROE), a measure reflecting how efficiently a company utilizes shareholders’ money, was 21.8% in the trailing 12 months. Moreover, ROE expanded 320 basis points year over year and compared favorably with the industry’s average of 10.3%.
Cboe Global boasts being the largest stock exchange operator by volume in the United States and a leading market for Exchange Traded Products 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 the medium-term organic total net revenue guidance of 5-7%.
In 2023, Cboe expects revenue-enhancing investments 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 revenue and cost synergies. In June 2022, Cboe Global closed the buyout of Aequitas NEO Exchange to strengthen its foothold in a key capital market and develop a comprehensive equities platform for the Canadian market.
Cboe Global 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. At present, CBOE had $217.9 million left under its current share repurchase authorizations.
CME Group’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average beat being 2.94%. In the past year, CME Group has lost 18.6%.
The Zacks Consensus Estimate for CME’s 2023 and 2024 earnings indicates 6.1% and 2.7% year-over-year growth, respectively.
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 2.2%.
The Zacks Consensus Estimate for AMP’s 2023 and 2024 earnings indicates 21.8% and 8.8% 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 41.8%.
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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Cboe Global (CBOE) Up 16.5% in a Year: Will the Rally Last?
Shares of Cboe Global Markets, Inc. (CBOE - Free Report) have gained 16.5% in a year against the industry's decline of 20.7%. The Zacks S&P 500 composite decreased 7.4% in the said time frame. With a market capitalization of $14.4 billion, the average volume of shares traded in the last three months was 0.7 million.
Image Source: Zacks Investment Research
The rally was largely driven by optimistic medium-term target, strong market position, strategic acquisitions, strength in its proprietary products and prudent capital deployment.
This Zacks Rank #3 (Hold) stock has a solid track of beating earnings estimates in three of the last four quarters while missing in one, with the average being 2.57%.
Can CBOE Stock Retain the Momentum?
The Zacks Consensus Estimate for Cboe Global’s 2023 earnings per share is pegged at $7.05, indicating a 1.7% increase from the year-ago reported figure on 6.7% higher revenues of $1.86 billion. The consensus estimate for 2024 earnings per share is pegged at $7.30, indicating a 3.4% increase from the year-ago reported figure on 3.9% higher revenues of $1.93 billion.
The Zacks Consensus Estimate for both 2023 and 2024 has moved north by 0.1% in the past seven days, reflecting analyst’s optimism.
Return on equity (ROE), a measure reflecting how efficiently a company utilizes shareholders’ money, was 21.8% in the trailing 12 months. Moreover, ROE expanded 320 basis points year over year and compared favorably with the industry’s average of 10.3%.
Cboe Global boasts being the largest stock exchange operator by volume in the United States and a leading market for Exchange Traded Products 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 the medium-term organic total net revenue guidance of 5-7%.
In 2023, Cboe expects revenue-enhancing investments 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 revenue and cost synergies. In June 2022, Cboe Global closed the buyout of Aequitas NEO Exchange to strengthen its foothold in a key capital market and develop a comprehensive equities platform for the Canadian market.
Cboe Global 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. At present, CBOE had $217.9 million left under its current share repurchase authorizations.
Stocks to Consider
Some better-ranked stocks from the finance sector are CME Group Inc. (CME - Free Report) , Ameriprise Financial, Inc. (AMP - 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.
CME Group’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average beat being 2.94%. In the past year, CME Group has lost 18.6%.
The Zacks Consensus Estimate for CME’s 2023 and 2024 earnings indicates 6.1% and 2.7% year-over-year growth, respectively.
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 2.2%.
The Zacks Consensus Estimate for AMP’s 2023 and 2024 earnings indicates 21.8% and 8.8% 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 41.8%.
The Zacks Consensus Estimate for AMK’s 2023 and 2024 earnings indicates 24.2% and 6.2% year-over-year growth, respectively.