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Is a Beat in Store for CME Group (CME) This Earnings Season?
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CME Group (CME - Free Report) is slated to report third-quarter 2023 earnings on Oct 25, before market open. CME delivered an earnings surprise in the last two reported quarters of 2023.
Factors to Consider
CME Group's diverse product portfolio, increased volatility as well as strong market position are expected to have aided its performance in the third quarter.
An increase in clearing, transaction fees and other revenues, and market data and information services is likely to have aided CME Group’s top line in the to-be-reported quarter. The Zacks Consensus Estimate for the top line is pegged at $1.3 billion, indicating an increase of 8.9% from the year-ago reported figure.
Clearing and transaction fees are likely to have benefited from increased volatility, which, in turn, is likely to have driven higher volumes. The Zacks Consensus Estimate for clearing and transaction fees is pegged at $1.1 billion, up 9.4% from year ago reported quarter and in line with our estimate.
Recently, CME Group reported soft average daily volume (ADV) for the third quarter of 2023. ADV of 22.3 million contracts decreased 0.4% year over year, as growth in interest rate, energy, agriculture and metals was offset by lower ADV at equities and forex.
Market data and information services revenues are likely to have increased owing to price increases for certain device fees as well as an increase in demand for the products. The consensus estimate for market data and information services is pegged at $164 million, indicating an increase of 6.5% from the year-ago reported figure. We estimate the metric to be $162.3 million.
Expenses are likely to have decreased in the to-be-reported quarter due to lower compensation and benefits, technology, reduced professional fees and outside services, amortization of purchased intangibles, lower depreciation and amortization. We estimate expense to be $584.2 million in the to-be-reported quarter.
The Zacks Consensus Estimate for third-quarter earnings per share is pegged at $2.21, indicating an increase of 11.6% from the year-ago quarter reported figure.
What the Zacks Model Says
Our proven model predicts an earnings beat for CME Group in the to-be-reported quarter. This is because the stock has the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).
Earnings ESP: CME Group has an Earnings ESP of +0.11%. This is because the Most Accurate Estimate of $2.22 is pegged higher than the Zacks Consensus Estimate of $2.21. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Some other stocks worth considering from the finance sector with a perfect mix of elements to surpass estimates in their upcoming quarterly releases are as follows:
Cboe Global Markets (CBOE - Free Report) has an Earnings ESP of +1.62% and a Zacks Rank of 3. The Zacks Consensus Estimate for third-quarter 2023 earnings is pegged at $1.82 per share, indicating an increase of 4.6% from the year-ago reported figure.
CBOE’s earnings beat estimates in the last four reported quarters.
Arch Capital Group (ACGL - Free Report) has an Earnings ESP of +1.37% and a Zacks Rank #2. The Zacks Consensus Estimate for third-quarter 2023 earnings is pegged at $1.48, implying an increase of 428.6% from the figure reported in the year-ago quarter.
ACGL’s earnings beat estimates in the last four reported quarters.
Enact Holdings (ACT - Free Report) has an Earnings ESP of +2.33% and a Zacks Rank of 2. The Zacks Consensus Estimate for third-quarter 2023 earnings is pegged at 86 cents, indicating a decrease of 26.5% from the year-ago reported figure.
ACT’s earnings beat estimates in three of the last four reported quarters and missed in one.
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Is a Beat in Store for CME Group (CME) This Earnings Season?
CME Group (CME - Free Report) is slated to report third-quarter 2023 earnings on Oct 25, before market open. CME delivered an earnings surprise in the last two reported quarters of 2023.
Factors to Consider
CME Group's diverse product portfolio, increased volatility as well as strong market position are expected to have aided its performance in the third quarter.
An increase in clearing, transaction fees and other revenues, and market data and information services is likely to have aided CME Group’s top line in the to-be-reported quarter. The Zacks Consensus Estimate for the top line is pegged at $1.3 billion, indicating an increase of 8.9% from the year-ago reported figure.
Clearing and transaction fees are likely to have benefited from increased volatility, which, in turn, is likely to have driven higher volumes. The Zacks Consensus Estimate for clearing and transaction fees is pegged at $1.1 billion, up 9.4% from year ago reported quarter and in line with our estimate.
Recently, CME Group reported soft average daily volume (ADV) for the third quarter of 2023. ADV of 22.3 million contracts decreased 0.4% year over year, as growth in interest rate, energy, agriculture and metals was offset by lower ADV at equities and forex.
Market data and information services revenues are likely to have increased owing to price increases for certain device fees as well as an increase in demand for the products. The consensus estimate for market data and information services is pegged at $164 million, indicating an increase of 6.5% from the year-ago reported figure. We estimate the metric to be $162.3 million.
Expenses are likely to have decreased in the to-be-reported quarter due to lower compensation and benefits, technology, reduced professional fees and outside services, amortization of purchased intangibles, lower depreciation and amortization. We estimate expense to be $584.2 million in the to-be-reported quarter.
The Zacks Consensus Estimate for third-quarter earnings per share is pegged at $2.21, indicating an increase of 11.6% from the year-ago quarter reported figure.
What the Zacks Model Says
Our proven model predicts an earnings beat for CME Group in the to-be-reported quarter. This is because the stock has the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).
Earnings ESP: CME Group has an Earnings ESP of +0.11%. This is because the Most Accurate Estimate of $2.22 is pegged higher than the Zacks Consensus Estimate of $2.21. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
CME Group Inc. Price and EPS Surprise
CME Group Inc. price-eps-surprise | CME Group Inc. Quote
Zacks Rank: CME Group currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Stocks to Consider
Some other stocks worth considering from the finance sector with a perfect mix of elements to surpass estimates in their upcoming quarterly releases are as follows:
Cboe Global Markets (CBOE - Free Report) has an Earnings ESP of +1.62% and a Zacks Rank of 3. The Zacks Consensus Estimate for third-quarter 2023 earnings is pegged at $1.82 per share, indicating an increase of 4.6% from the year-ago reported figure.
CBOE’s earnings beat estimates in the last four reported quarters.
Arch Capital Group (ACGL - Free Report) has an Earnings ESP of +1.37% and a Zacks Rank #2. The Zacks Consensus Estimate for third-quarter 2023 earnings is pegged at $1.48, implying an increase of 428.6% from the figure reported in the year-ago quarter.
ACGL’s earnings beat estimates in the last four reported quarters.
Enact Holdings (ACT - Free Report) has an Earnings ESP of +2.33% and a Zacks Rank of 2. The Zacks Consensus Estimate for third-quarter 2023 earnings is pegged at 86 cents, indicating a decrease of 26.5% from the year-ago reported figure.
ACT’s earnings beat estimates in three of the last four reported quarters and missed in one.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.