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On Wednesday, Keefe, Bruyette & Woods maintained their Market Perform rating on CME Group (NASDAQ:CME) with a steady price target of $257.00. The firm’s analysis highlighted that CME Group’s average daily volume (ADV) for the month of February reached 33.1 million, which brings the total futures ADV for the first quarter of 2025 to date to 29.2 million. This figure is tracking 11% above Keefe’s estimate for the full quarter. The company’s strong operational performance is reflected in its impressive 9.9% revenue growth over the last twelve months. InvestingPro subscribers can access 8 additional key insights about CME’s business performance and growth prospects.
The firm noted that the rolling realized price per contract (RPC (NYSE:RES)) for the three months ending in January is somewhat below their estimates for the full quarter, particularly in the Energy sector. It was mentioned that CME Group’s changes to transaction fees, which were implemented in February, were not reflected in the rolling 3-month RPC data through January.
Keefe has set its earnings per share (EPS) estimate for CME Group in the first quarter of 2025 at $2.60, matching the consensus among analysts. If the trends in volumes and rolling lagged RPCs, as well as collateral balances through January, continue for the rest of the quarter, Keefe suggests that the results could surpass the consensus by approximately $0.18, assuming all other factors remain constant. The company maintains a strong dividend yield of 4.29% and has consistently paid dividends for 23 consecutive years.
The firm’s commentary indicates that the performance of CME Group in the first quarter is on a positive trajectory when considering the reported volumes and the recent fee changes. Keefe’s maintained Market Perform rating and price target reflect their current assessment of CME Group’s stock potential based on these factors. Trading at a P/E ratio of 26.12, InvestingPro’s Fair Value analysis suggests the stock is slightly overvalued at current levels. For detailed valuation metrics and comprehensive analysis, investors can access the full Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, CME Group’s financial performance and market activities have attracted attention from several analyst firms, resulting in various updates to their stock price targets. UBS has raised its price target for CME Group to $290, maintaining a Buy rating, citing anticipated robust trading volumes and fee increases as drivers for future revenue growth. Keefe, Bruyette & Woods also adjusted their price target slightly to $257, following CME Group’s earnings that exceeded expectations by $0.06 per share, driven by higher revenues and lower tax rates. Similarly, RBC Capital Markets increased their price target to $269, reflecting higher earnings estimates and an elevated earnings multiple, while maintaining a Sector Perform rating due to tough market comparisons.
Citi analysts have raised their price target to $265, attributing the increase to CME Group’s record average daily volume of 33.1 million contracts in February, which marked a 12% year-over-year growth. The strong performance was noted across several sectors, including metals and agricultural commodities. Despite these positive developments, Citi maintained a Neutral rating, suggesting limited upside potential on an absolute basis. Analysts have observed that CME Group’s strategic positioning in the market, along with its diverse asset offerings, could benefit from ongoing market volatility.
Additionally, CME Group’s fourth-quarter results for 2024 surpassed analyst expectations, prompting RBC Capital to highlight the potential for volume growth driven by macroeconomic uncertainty and market volatility. The company’s guidance for expenses in 2025 aligns with forecasts, and opportunistic share repurchases are seen as a potential catalyst for stock performance. Overall, these recent developments have led to a mix of cautious optimism and strategic adjustments in price targets by the analyst community.
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