CBOE shares target lowered at Oppenheimer on slowing SPX options growth

Published 12/07/2024, 15:28
CBOE
-

On Friday, CBOE Holdings (NYSE:CBOE) saw its price target reduced by Oppenheimer to $199 from the previous target of $206, while the firm maintained an Outperform rating on the shares. The adjustment came after a detailed analysis of the company's financial outlook, which highlighted a mix of positive and slower growth areas.

The revised price target reflects a decrease based on slowing growth in SPX options. Despite this, the firm raised its second-quarter 2024 adjusted earnings per share (EPS) estimate to $2.11, slightly above the consensus estimate of $2.10, up from the prior forecast of $2.04. This increase is attributed to a stronger-than-anticipated performance in VIX futures, which saw a year-over-year increase of 30%, and VIX options trading volume.

Additionally, the full-year EPS forecasts for both 2024 and 2025 were raised to $8.56 and $9.05, respectively, up from the earlier estimates of $8.44 and $8.95. These adjustments reflect the expected positive impact of the higher trading volumes on the company's financials.

In the report, it was noted that despite the reduced price target, revenue growth is still expected to exceed 11% year-over-year in the second quarter of 2024. Furthermore, management is anticipated to focus on stabilizing and potentially expanding profit margins.

CBOE Holdings is currently trading at approximately 90% of the relative multiple, which is below its long-term average of 130%. This valuation led the firm to consider the stock's current trading level attractive, suggesting a potential upside from the current market price.

In other recent news, CBOE Holdings has experienced a series of significant developments. The company reported a robust start to the year, with a 7% increase in net revenues to a record $502 million and a 13% rise in adjusted diluted earnings per share to $2.15, driven by the performance of its derivatives and Data and Access Solutions businesses.

CBOE also announced plans to consolidate its digital asset business, expecting future cost savings after absorbing near-term impairment charges.

JPMorgan and Rosenblatt Securities have both revised their price targets for CBOE, reflecting their expectations of the company's continued growth. JPMorgan raised its price target to $166, maintaining an Underweight rating, while Rosenblatt Securities increased its target to $205, retaining a Buy rating.

These developments are part of a series of recent movements for CBOE, including a strategic shift in operations and record trading volumes. The company's management has also adjusted its full-year 2024 operating expenses guidance to between $795 million and $805 million.

These are the latest in a series of recent developments, demonstrating CBOE's momentum in the financial markets.

InvestingPro Insights

In light of Oppenheimer's revised price target and financial outlook for CBOE Holdings, closely monitoring the company's performance metrics becomes even more pertinent. According to recent InvestingPro data, CBOE is trading at a P/E ratio of 22.72, which is considered low relative to its near-term earnings growth. The company's PEG ratio stands at an attractive 0.13, further underscoring its potential for growth compared to earnings projections. Additionally, with a Price / Book ratio of 4.44, the stock may be considered by some investors as trading at a premium relative to its book value.

InvestingPro Tips reveal a mixed sentiment among analysts, with some revising their earnings downwards for the upcoming period, yet others predict the company will remain profitable this year. Notably, CBOE has a commendable track record of raising its dividend for 9 consecutive years, and it has maintained dividend payments for 15 consecutive years, with a dividend yield currently at 1.26%. These factors could be of interest to investors seeking stable income-generating stocks.

For investors seeking a deeper dive into CBOE's financials and future outlook, InvestingPro offers additional tips and metrics. With a coupon code PRONEWS24, readers can get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription to access comprehensive analysis and insights. There are 9 additional InvestingPro Tips available for CBOE, which could guide investors in making more informed decisions.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.