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On Tuesday, Argus Research analyst Stephen Biggar increased the price target on CME Group (NASDAQ:CME) shares, lifting it to $308 from the previous $285, while reaffirming a Buy rating on the stock. The revision reflects anticipation of growth in various contract volumes due to current economic and geopolitical conditions. The new target aligns with the broader analyst consensus, as InvestingPro data shows analyst targets ranging from $211 to $305, with CME currently trading near its 52-week high at $284.63.
In his statement, Biggar highlighted that the rise in interest-rate contract volume at CME Group is expected to continue as inflation fears, tariffs, and geopolitical concerns remain prominent. He noted that the MOVE index, which measures bond market volatility, is significantly elevated, signaling potential for increased trading activity. This momentum is reflected in CME’s strong financial performance, with InvestingPro showing a remarkable 32.21% price return over the past six months and an impressive 42.13% return over the past year.
The analyst also projects higher volumes for equity index, agricultural, cryptocurrency, and micro contracts, especially among retail investors. He commended CME Group for its robust cost control measures. Biggar pointed out that CME Group’s shares are currently trading at 24 times the revised 2025 earnings per share (EPS) estimate, which aligns with the midpoint of their five-year historical average range of 20 to 34 times and is comparable to the peer average.
The decision to raise the price target is based on the belief that the heightened market volatility will lead to increased revenue for CME Group. Biggar’s revised target price of $308 represents 27 times the revised 2025 EPS estimate, suggesting a higher valuation multiple is justified given the company’s prospects.
In other recent news, CME Group reported robust financial performance for the first quarter of 2025, achieving record revenue of $1.64 billion and an adjusted earnings per share (EPS) of $2.80, both surpassing analyst expectations. Despite these strong results, the company’s revenue fell slightly short due to a modeling error, but adjusted operating expenses were better than anticipated. Barclays (LON:BARC) adjusted its price target for CME Group, raising it from $279 to $283, while maintaining an Equalweight rating, citing the company’s resilience amid market volatility. Raymond (NSE:RYMD) James also increased its price target for CME Group to $297, keeping an Outperform rating, reflecting confidence in the company’s potential amidst challenging global economic conditions. RBC Capital maintained a Sector Perform rating with a price target of $269, highlighting CME Group’s growth potential during market fluctuations. Recent developments also include record trading volumes across multiple products, driven by heightened market volatility, which has bolstered the company’s collateral holdings. Additionally, CME Group is expanding its international and product offerings, with significant growth in its Market and Data Information segment, benefiting from increased subscriber numbers and pricing advantages.
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