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CME Group Inc. (CME), headquartered in Chicago, Illinois, operates contract markets for the trading of futures and options on futures contracts. Valued at $78.7 billion by market cap, it offers futures and options products based on interest rates, equity indexes, foreign exchange, agricultural commodities, energy, and metals, and more. It facilitates trading on its trading floors, electronic platform, and through privately negotiated transactions that it clears.
Companies worth $10 billion or more are generally described as “large-cap stocks.” CME fits well into that category, with its market cap exceeding this mark, underscoring its size, influence, and dominance in its industry. CME solidifies its leadership in the derivatives market with a diverse portfolio of trading products in interest rates, equity indexes, foreign currencies, and commodities. Its investment in S&P Dow Jones Indices enhances its market position by granting exclusive rights to trade and clear S&P futures contracts, strengthening its competitive advantage.
CME slipped 2.3% from its 52-week high of $223.80, achieved on Dec. 4, 2023. Over the past three months, CME stock has gained 10%, outperforming the Nasdaq Composite’s ($NASX) marginal gains during the same time frame.
In the longer term, shares of CME rose 3.8% on a YTD basis and climbed 6.2% over the past 52 weeks, underperforming NASX’s YTD gains of 15.9% and solid 25% returns over the last year.
However, CME has traded above its 50-day and 200-day moving averages since last month, indicating a recent bullish trend.
On Sep. 5, CME shares closed up more than 1% after Citigroup Inc. (C) put the stock on a 90-day upside catalyst watch ahead of an expected dividend announcement in December.
On Jul. 24, CME shares closed down marginally after reporting its Q2 results. Its record adjusted EPS of $2.56 beat Wall Street expectations of $2.51. The company’s revenue was $1.53 billion, beating Wall Street forecasts of $1.52 billion. Its average daily volume (ADV) was 25.9 million contracts, including non-U.S. ADV, which reached a record 7.8 million contracts.
In the competitive arena, Intercontinental Exchange, Inc. (ICE) has taken the lead over CME, delivering 24.6% returns on a YTD basis and solid 39.1% gains over the past 52 weeks.
Wall Street analysts are moderately bullish on CME’s prospects. The stock has a consensus “Moderate Buy” rating from the 16 analysts covering it. While CME currently trades above its mean price target of $214.73, the Street-high price target of $250 suggests an upside potential of 14.4%.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
