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Valued at $83.9 billion by market cap, CME Group Inc. (CME) operates as the world’s leading derivatives marketplace. The Chicago-based derivatives exchange offers the widest range of global benchmark products across all major asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural commodities, metals, weather and real estate.
The financial sector giant is set to announce its fourth-quarter results before the markets open on Wednesday, Feb. 12. Ahead of the event, analysts expect CME to report a non-GAAP profit of $2.45 per share, up 3.4% from $2.37 per share reported in the year-ago quarter. Furthermore, the company has surpassed Wall Street’s bottom-line projections in each of the past four quarters. Its adjusted EPS for the last reported quarter surged 19.1% year-over-year to $2.68, exceeding analysts' estimates by 1.1%.
For the full fiscal 2024, CME is expected to deliver an adjusted EPS of $10.18, up nearly 9% from $9.34 in fiscal 2023. While in fiscal 2025, its earnings are expected to increase by a modest 1.4% year-over-year to $10.32 per share.
CME stock prices have gained 14.7% over the past 52 weeks, lagging behind the S&P 500 Index’s ($SPX) 26.5% surge and the Financial Select Sector SPDR Fund’s (XLF) 34.8% returns during the same time frame.
CME Group’s stock prices observed a marginal uptick after the release of its impressive Q3 results on Oct. 23. Q3 2024 turned out to be the best quarter in the company's history, with record volumes, revenues, and earnings. This marked the second consecutive quarter of volume and open interest increases across every asset class. The robust growth in clearing and transaction fees drove CME's total revenues up by 18.4% year-over-year to $1.6 billion, surpassing Wall Street’s expectations. Additionally, the company demonstrated impressive expense discipline, leading to a 21.7% year-over-year growth in GAAP-based net income to shareholders, reaching $901.3 million.
However, analysts remain cautious about the stock’s prospects. CME has a consensus “Hold” rating overall. Among the 18 analysts covering the stock, six recommend “Strong Buy,” nine suggest “Hold,” one advises “Moderate Sell,” and two advocate a “Strong Sell” rating. Its mean price target of $244.71 represents a modest 5.2% upside potential from current price levels.
