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Cboe Global (CBOE) Rises 19% YTD: Will the Bull Run Continue?
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Cboe Global Markets’ (CBOE - Free Report) shares have gained 19.4% year to date, outperforming the industry’s increase of 13%. The Finance sector increased 4.1% and the Zacks S&P 500 composite gained 16% in the same period. With a market capitalization of $15.8 billion, the average volume of shares traded in the last three months was 0.6 million.
Strong market position, global reach, strength in its proprietary products and solid capital position continue to drive this largest stock exchange operator by volume in the United States and a leading market globally for ETP trading.
CBOE, carrying a Zacks Rank #3 (Hold), has a decent history of delivering earnings surprises in the last four reported quarters. Its earnings grew 13.7% in the last five years, better than the industry average of 10.5%.
Return on equity, a profitability measure of how efficiently a company utilizes its shareholders' money, was 22% in the trailing 12 months, up 200 basis points year over year and better than the industry average of 11.8%.
Image Source: Zacks Investment Research
Can It Retain the Momentum?
The Zacks Consensus Estimate for 2023 earnings is pegged at $7.27, suggesting a year-over-year increase of 4.9% on 9.1% higher revenues of $1.9 billion. The consensus estimate for 2024 earnings is pegged at $7.51, indicating a year-over-year increase 3.3% on 3.4% higher revenues of $2 billion.
CBOE boasts operations in the highest-value markets. These are powered by a diversified business mix with recurring revenues, growth acceleration with recurring non-transaction revenues, technology and an impressive inorganic growth story that should fuel the top line. For the mid-to-long term, CBOE estimates organic top-line compound average growth of 4% to 6%.
Organic growth remained a key strength at Cboe Global Markets, as reflected in its revenue growth story. A volatile market continues to aid trading volume. CBOE estimates organic total net revenue growth between 7% and 9% in 2023. It estimates revenue-enhancing investments to be in the range of $28-$30 million in 2023.
With its latest dividend hike, CBOE increased dividends for 13 straight years. It also pursued share buybacks. As of Jun 30, 2023, CBOE had $139.8 million left under its current share repurchase authorization.
The Zacks Consensus Estimate for CME Group’s 2023 and 2024 earnings indicates a respective 13.4% and 1.4% year-over-year increase. The consensus estimate has risen 2% for 2023 and 2.5% for 2024 in the past 30 days. CME delivered a four-quarter average earnings surprise of 2.92%. Shares have risen 19.3% year to date. The expected long-term earnings growth rate is pegged at 7.3%.
The Zacks Consensus Estimate for Intercontinental Exchange’s 2023 and 2024 EPS indicates a 6.6% and 8.3% year-over-year increase, respectively. The consensus estimate has risen 1.6% for 2023 and 1.2% for 2024 in the past 30 days. ICE delivered a four-quarter average earnings surprise of 2.07%. The expected long-term earnings growth rate is pegged at 8.8%. Shares have risen 11.4% year to date.
Marsh & McLennan delivered a four-quarter average earnings surprise of 3.44%. The Zacks Consensus Estimate for 2023 and 2024 earnings indicates a respective 12.6% and 9.2% year-over-year increase. The consensus estimate has risen 0.1% for 2023 and 1.3% for 2024 in the past 30 days. The expected long-term earnings growth rate is pegged at 10.5%. Its shares have risen 15.6% year to date.
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Cboe Global (CBOE) Rises 19% YTD: Will the Bull Run Continue?
Cboe Global Markets’ (CBOE - Free Report) shares have gained 19.4% year to date, outperforming the industry’s increase of 13%. The Finance sector increased 4.1% and the Zacks S&P 500 composite gained 16% in the same period. With a market capitalization of $15.8 billion, the average volume of shares traded in the last three months was 0.6 million.
Strong market position, global reach, strength in its proprietary products and solid capital position continue to drive this largest stock exchange operator by volume in the United States and a leading market globally for ETP trading.
CBOE, carrying a Zacks Rank #3 (Hold), has a decent history of delivering earnings surprises in the last four reported quarters. Its earnings grew 13.7% in the last five years, better than the industry average of 10.5%.
Return on equity, a profitability measure of how efficiently a company utilizes its shareholders' money, was 22% in the trailing 12 months, up 200 basis points year over year and better than the industry average of 11.8%.
Image Source: Zacks Investment Research
Can It Retain the Momentum?
The Zacks Consensus Estimate for 2023 earnings is pegged at $7.27, suggesting a year-over-year increase of 4.9% on 9.1% higher revenues of $1.9 billion. The consensus estimate for 2024 earnings is pegged at $7.51, indicating a year-over-year increase 3.3% on 3.4% higher revenues of $2 billion.
CBOE boasts operations in the highest-value markets. These are powered by a diversified business mix with recurring revenues, growth acceleration with recurring non-transaction revenues, technology and an impressive inorganic growth story that should fuel the top line. For the mid-to-long term, CBOE estimates organic top-line compound average growth of 4% to 6%.
Organic growth remained a key strength at Cboe Global Markets, as reflected in its revenue growth story. A volatile market continues to aid trading volume. CBOE estimates organic total net revenue growth between 7% and 9% in 2023. It estimates revenue-enhancing investments to be in the range of $28-$30 million in 2023.
With its latest dividend hike, CBOE increased dividends for 13 straight years. It also pursued share buybacks. As of Jun 30, 2023, CBOE had $139.8 million left under its current share repurchase authorization.
Stocks to Consider
Some top-ranked stocks from the insurance industry are CME Group (CME - Free Report) , Intercontinental Exchange (ICE - Free Report) and Marsh & McLennan Companies (MMC - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for CME Group’s 2023 and 2024 earnings indicates a respective 13.4% and 1.4% year-over-year increase. The consensus estimate has risen 2% for 2023 and 2.5% for 2024 in the past 30 days. CME delivered a four-quarter average earnings surprise of 2.92%. Shares have risen 19.3% year to date. The expected long-term earnings growth rate is pegged at 7.3%.
The Zacks Consensus Estimate for Intercontinental Exchange’s 2023 and 2024 EPS indicates a 6.6% and 8.3% year-over-year increase, respectively. The consensus estimate has risen 1.6% for 2023 and 1.2% for 2024 in the past 30 days. ICE delivered a four-quarter average earnings surprise of 2.07%. The expected long-term earnings growth rate is pegged at 8.8%. Shares have risen 11.4% year to date.
Marsh & McLennan delivered a four-quarter average earnings surprise of 3.44%. The Zacks Consensus Estimate for 2023 and 2024 earnings indicates a respective 12.6% and 9.2% year-over-year increase. The consensus estimate has risen 0.1% for 2023 and 1.3% for 2024 in the past 30 days. The expected long-term earnings growth rate is pegged at 10.5%. Its shares have risen 15.6% year to date.