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On Friday, UBS analyst Alex Kramm adjusted the price target for CBOE Holdings (NYSE: CBOE), increasing it to $235.00 from the previous $220.00 while maintaining a Neutral rating on the stock. According to InvestingPro data, six analysts have recently revised their earnings estimates upward for the upcoming period, suggesting growing confidence in CBOE’s prospects. The stock is currently trading at $209.37, near its 52-week high of $221.52. The revision follows the release of CBOE’s March metrics, which prompted UBS to raise their first quarter 2025 earnings per share (EPS) estimate by approximately 4% to $2.35, up from $2.25. This estimate is slightly above the consensus of $2.23.
The revenue forecast for CBOE in the first quarter has been increased by 3%, largely attributed to the performance of the index options business. Average daily volume (ADV) in index options saw a 4% increase compared to UBS’s earlier estimate, and revenue per contract (RPC (NYSE:RES)) experienced a 1% rise against prior estimates. This growth trajectory aligns with CBOE’s strong financial health score of "GREAT" on InvestingPro, which offers comprehensive analysis through its Pro Research Report, available for over 1,400 US stocks. The overall net revenue for the quarter is anticipated to grow by 12% year-over-year, bolstered by a 17% increase in index options volumes. Equity options and cash equities are also contributing positively to the revenue.
Kramm’s report indicates that recent market volatility has been a factor in driving CBOE’s stock price upward, contributing to an impressive 49.92% return over the past year. The raised price target reflects the ongoing market uncertainties that could affect the stock’s performance. Despite the increased target, UBS expresses a preference for CME Group (NASDAQ:CME), citing its greater volume exposure and more attractive valuation relative to its historical multiples. CBOE currently maintains a solid dividend yield of 1.23% and has consistently paid dividends for 16 consecutive years, as revealed by InvestingPro analysis.
In other recent news, Cboe Global Markets (NYSE:CBOE) reported record-breaking options trading volumes for February, achieving an Average Daily Trading Volume (ADV) of 18.0 million contracts in U.S. options. This was bolstered by a historic 13.6 million multiply-listed options contracts and 3.5 million contracts for S&P 500 Index options. Additionally, Cboe’s futures market saw a milestone with the largest block trade of Cboe iBoxx iShares $ Investment Grade Corporate Bond Index futures, pushing open interest beyond $479 million notional. In a separate development, Cboe announced the promotion of Tim Lipscomb to Executive Vice President and Chief Technology Officer, emphasizing the company’s focus on technological advancement and market expansion. Analyst firm Keefe, Bruyette & Woods raised their price target for Cboe to $216, citing strong trading volumes despite a recent earnings miss. RBC Capital Markets maintained a Sector Perform rating on Cboe with a price target of $220, noting the company’s fiscal year 2025 guidance and the challenges of tough comparisons. RBC highlighted Cboe’s expectations for mid-single-digit organic growth and the expansion of services in the U.S., Europe, and Australia. The company also anticipates growth in its Data Vantage segment, supported by a 33% increase in annual contract value in fiscal year 2024.
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