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Valued at a market cap of $22.6 billion, Cboe Global Markets, Inc. (CBOE) is a leading global exchange operator, offering a wide range of trading products across various asset classes, including options, equities, futures, foreign exchange, and digital assets. The Chicago, Illinois-based company is one of the largest stock exchange operators by volume in the United States and a dominant player in European markets.
The holding company's shares have underperformed the broader market over the past 52 weeks. CBOE has increased 20.3% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 32.6%. In 2024, shares of CBOE are up 20.9%, compared to SPX’s 26.5% gain on a YTD basis.
In addition, CBOE has also lagged behind the Financial Select Sector SPDR Fund’s (XLF) 44.6% return over the past 52 weeks and 36.5% return on a YTD basis.
Despite reporting better-than-expected Q3 net revenue of $532 million and adjusted EPS of $2.22, shares of CBOE fell 1.7% on Nov. 1 due to a weaker-than-expected performance in its U.S. equities segment, with a decline in market share and lower off-exchange market share. Additionally, the company’s forecasted increase in operating expenses to $798 million-$808 million, raised concerns about potential cost pressures. Lastly, the market's focus on broader macroeconomic factors and a higher effective tax rate dampened investor enthusiasm.
For the current fiscal year, ending in December, analysts expect CBOE’s EPS to grow 11% year-over-year to $8.66. The company’s earnings surprise history is promising. It beat the consensus estimates in the last four quarters.
Among the 17 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on five “Strong Buy” ratings and 12 “Holds.”
On Nov. 11, Deutsche Bank analyst Brian Bedell upgraded Cboe Global Markets to a "Buy" rating from "Hold" and set a price target of $222.
As of writing, CBOE is trading above the mean price target of $213.81. The Street-high price target of $232 implies a potential upside of only 7.5% from the current price levels.
