CME stock holds Market Perform rating, $257 target from KBW

Published 03/04/2025, 12:46
CME stock holds Market Perform rating, $257 target from KBW

On Thursday, Keefe, Bruyette & Woods maintained a Market Perform rating on CME Group (NASDAQ:CME) with a steady price target of $257.00. The firm’s analyst, Kyle Voigt, provided insights into the company’s first-quarter performance, noting that CME Group’s average daily volume (ADV) for March was 30.8 million, which led to a total futures ADV of 29.8 million for the first quarter of 2025. This figure represents a 13% increase from Keefe, Bruyette & Woods’ estimate of 26.3 million for the full quarter.

Despite the higher volumes, the analyst observed that the rolling realized price per contract (RPC (NYSE:RES)) for the three months ending in February showed mixed results, trending mixed to lower compared to the firm’s full-quarter estimates. With a P/E ratio of 26.98 and strong financial health metrics according to InvestingPro, which has identified 8+ additional key insights available to subscribers, the company maintains robust fundamentals. Voigt highlighted that CME Group’s transaction fee changes were only implemented in February, which could be a factor in the RPC performance.

The firm’s earnings per share (EPS) estimate for CME Group in the first quarter of 2025 stands at $2.60, which is slightly below the consensus estimate of $2.64. However, Voigt suggested that, based on the actual volumes for the first quarter and assuming that the rolling lagged RPCs and collateral balances through February remained consistent for the rest of the quarter, CME Group’s results could potentially be tracking $0.16 above the consensus, assuming all other factors remain constant.

In summary, Keefe, Bruyette & Woods reaffirmed their Market Perform rating on CME Group shares, with a price target that reflects the firm’s analysis of the company’s recent volume performance and the impact of transaction fee changes on RPCs. The EPS estimate provided by the firm indicates a cautious but slightly optimistic view of CME Group’s financial outcomes for the first quarter of 2025.

In other recent news, CME Group reported record-breaking average daily volumes in the first quarter of 2025, achieving a new all-time quarterly record of 29.8 million contracts. This growth spanned across interest rate, equity index, agricultural, foreign exchange, and cryptocurrency products, with notable performance in U.S. Treasury and Henry Hub Natural Gas complexes. Meanwhile, Raymond (NSE:RYMD) James maintained its Outperform rating for CME Group, citing the company’s strong trading volumes and comprehensive risk management offerings. The firm believes CME Group’s valuation multiple has potential for growth, supported by the diminishing concerns about competitive pressures and Federal Reserve rate cuts.

Additionally, CME Group launched new Solana futures contracts, broadening its cryptocurrency product offerings. This launch reflects growing institutional interest in cryptocurrency derivatives, providing investors with more capital-efficient tools. Erste Group initiated coverage of CME Group stock with a Buy rating, highlighting the company’s innovative risk management products and potential for positive earnings surprises. The analysts anticipate increased trading and hedging activities in 2025, which could lead to better-than-expected sales and earnings. These developments underscore CME Group’s strategic expansion and robust market engagement.

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