CME Retains Neutral Rec - Analyst Blog
29 Gennaio 2013 - 6:37PM
Zacks
On January 28, we reiterated our Neutral recommendation on
CME Group Inc. (CME) based on the sluggish trading
volumes across segments, although the expense management and
liquidity remain impressive.
Why the Reiteration?
Estimates for CME Group have been witnessing a downward trend
ever since it reported its third quarter results in October last
year. The company’s third quarter top line of $683.2 million missed
the Zacks Consensus Estimate of $685.0 million, although earnings
per share of 70 cents came in a penny higher than the Zacks
Consensus Estimate. The company has outperformed estimates in three
of the last four quarters, leading to an average surprise of 2.4%.
Over the last 90 days, the Zacks Consensus Estimate for 2012 has
edged down 0.7% to $3.03 per share. The Most Accurate estimate for
CME Group’s 2012 earnings also stands at $3.03 cents, resulting in
an Earnings Surprise Prediction (ESP) of 0.0%. ESP is a leading
indicator of an expected positive earnings surprise for shares. As
a result, the company carries a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for 2013 has also declined modestly
(down 4.1% to $3.24 per share). Lower trading volumes continue to
cast a cautious outlook for most of 2013 as well. CME Group is
slated to release its fourth-quarter 2012 results after the closing
bell on February 5, 2013.
We believe that CME Group’s efforts to promote, expand and
cross-sell its core exchange-traded business through strategic
alliances, meaningful acquisitions, newer product initiatives along
with its global presence should generate a decent growth in the
long run. Nevertheless, currency fluctuations and interest rate
volatility pose operational risks.
Alongside, the recently proposed merger of NYSE Euronext
Inc. (NYX) and IntercontinentalExchange
Inc. (ICE) is liable to snip off CME Group’s market share
upon successful completion, adding to the already intense
competitiveness. Hence, the near term outlook seems grim and may
continue to dampen the company’s operating leverage and margins
until the derivative markets gain traction.
Other Stocks to Consider
While we prefer CME Group in the exchange industry based on its
fundamental strength, other stocks such as CBOE Holdings
Inc. (CBOE), which carries a Zacks Rank #2 (Buy), is worth
a look.
CBOE HOLDINGS (CBOE): Free Stock Analysis Report
CME GROUP INC (CME): Free Stock Analysis Report
INTERCONTINENTL (ICE): Free Stock Analysis Report
NYSE EURONEXT (NYX): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Grafico Azioni NYSE Group (NYSE:NYX)
Storico
Da Giu 2024 a Lug 2024
Grafico Azioni NYSE Group (NYSE:NYX)
Storico
Da Lug 2023 a Lug 2024