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CME Group Trades Above 50- and 200-Day SMA: How to Play the Stock?

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Key Takeaways

  • CME trades above its 50- and 200-day SMAs, with shares up 20.1% over the past year, beating industry growth.
  • Analysts see an average $294.07 price target for CME, implying about 5.21% upside from the last close.
  • CME trades at 25.5x forward P/E, below the industry average, supported by strong cash flow and margins.

CME Group Inc. (CME - Free Report) is the world’s largest financial derivatives exchange, currently trading above its 50-day simple moving average (SMA) and 200- day SMA, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analysing historical price data.

Based on short-term price targets offered by 15 analysts, the average price target for CME Group is $294.07. The average price target represents an increase of 5.21% from the last closing price of $279.50, reflecting upside potential.

CME has diversified products, strong risk controls, steady market-data revenues and reliable technology, making it a stable and reliable business despite market fluctuations, and a good option for long-term investment.

Share Price & Peer Performance

Shares of CME Group have gained 20.3% over the past year, outperforming the industry's growth of 13.7%. CME Group has outperformed its peers, Deutsche Borse AG (DBOEY - Free Report) & S&P Global Inc. (SPGI - Free Report) , which have gained 3.6% and 8.8%, respectively, but underperformed Cboe Global Markets, Inc. (CBOE - Free Report) , which has gained 40.4% over the same time frame.

Zacks Investment Research
Image Source: Zacks Investment Research

Valuation

CME is currently trading at a 12-month forward price-to-earnings of 23.75X, below the industry average 25.17X.

Zacks Investment Research
Image Source: Zacks Investment Research

It is also trading cheaper than SPGI and CBOE, with a 12-month forward price-to-earnings of 31.58X and 28.11X, respectively. CME is, however, expensive than DBOEY, trading at a 12-month forward price-to-earnings 18.85X.

Based on this ratio, CME can be considered as a stable, high-quality exchange with moderate growth rate.

Positive Analyst Outlook

For 2026, the Zacks Consensus Estimate projects revenue growth of 5.3% and an earnings rise of 5%. The consensus estimate has moved 0.9% north over the past 30 days.

The consensus estimates for CBOE, DBOEY and SPGI’s revenues have witnessed northbound revision over the same time frame.

What’s Driving CME?

CME earns very high profits and generates strong cash flow, giving it financial strength and stability even when trading activity slows. Its business model requires less capital, which helps keep profits high.

CME benefits from higher market volatility, which boosts trading activity. Strong trading volumes show steady demand and client trust, while growing international trading reduces dependency on the United States and supports long-term growth.

The company is experiencing rising electronic trading volumes alongside growing adoption of crypto-related products, reflecting broader interest across the digital-asset ecosystem. With President Trump’s second term signaling a more favorable regulatory environment for crypto, increased institutional participation and easing regulatory constraints could further support growth. 

A key strength of CME lies in its ability to grow organically. The company also benefits from strong network effects. Deep liquidity in its flagship contracts attracts additional participants, making it difficult for competitors to replicate or displace its core markets.

CME’s ongoing investments are delivering favourable results, with a focus on disciplined cost management to enhance margins.

CME had $2.6 billion in cash and $3.4 billion in debt as of Sept. 30, 2025. This shows the company has good liquidity and manageable debt, supporting financial stability and its ability to return cash to shareholders without taking on high risk.

CME pays a stable quarterly dividend along with an annual variable dividend that accounts for most of its yield. Although appealing to income investors, the high payout ratio results in most cash being returned to shareholders rather than reinvested in growth initiatives, indicating that future growth is likely to be moderate.

However, CME faces concentration risk, as interest rate and equity products still account for a substantial portion of clearing and transaction revenues. The company also operates in an increasingly competitive landscape. Regulatory changes may intensify competition from crypto platforms, alternative instruments, electronic communication networks, and bank-owned trading venues, posing ongoing challenges to market share.

Conclusion

CME is a strong and stable company with solid profitability, steady growth and reliable dividends. However, the upside appears limited, and rising competition may weigh on growth. At current levels, the Zacks Rank #3 (Hold) stock looks fairly valued, making it appropriate to hold it while waiting for clearer signs of stronger growth. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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