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With a market cap of $86.2 billion, Chicago, Illinois-based CME Group Inc. (CME) is the world's largest futures exchange by trading volume and notional value traded. Serving professional traders, financial institutions, corporations, and central banks, CME Group offers advanced trading platforms, clearing solutions, and market data services to a global audience.
Companies valued at $10 billion or more are generally considered "large-cap" stocks, and CME Group fits this criterion perfectly. CME Group provides central counterparty clearing services through CME Clearing and CME Clearing Europe, ensuring the settlement and risk management of exchange-traded and over-the-counter derivatives.
However, shares of the company have slipped nearly 5% from its 52-week high of $249.02. CME Group stock has gained 7.9% over the past three months, lagging behind the broader Dow Jones Industrials Average's ($DOWI) 9.1% rise over the same time frame.
In the long term, CME is up nearly 12% on a YTD basis, underperforming DOWI's 18.2% gains. In addition, shares of CME have increased 11.4% over the past 52 weeks, compared to Dow Jones' 22.8% returns over the same time frame.
Yet, CME has shown a bullish trend, consistently trading above its 50-day and 200-day moving averages since August.
Shares of CME Group recovered marginally on Oct. 23 due to its strong Q3 2024 earnings report, which highlighted a 19.1% year-over-year increase in adjusted EPS to $2.68, surpassing analyst expectations. The record trading volumes, with average daily volume (ADV) up 20% in commodities and 28% in financial markets, boosted investor sentiment. Revenues of $1.6 billion, up 18.4% year-over-year and driven by a 19.5% increase in clearing and transaction fees, further supported the positive market reaction. Additionally, a 24.8% rise in operating income demonstrated CME’s effective leverage of increased trading activity.
In comparison, CME Group’s rival Coinbase Global, Inc. (COIN) has demonstrated impressive growth, climbing 80.7% YTD and achieving a remarkable 114.4% increase over the past 52 weeks, significantly outpacing CME's performance.
Despite the stock's underperformance over the past year, analysts are moderately optimistic about its prospects. The stock has a consensus “Moderate Buy” rating overall from the 17 analysts covering the stock, and as of writing, CME is trading below the mean price target of $237.25.
