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CME Group Inc. (CME), headquartered in Chicago, Illinois, is renowned as the world’s leading derivatives marketplace. Valued at $70.98 billion by market cap, the company offers a broad range of global benchmark products across all major asset classes based on interest rates, equity indexes, foreign exchange, energy, agricultural products, and metals. It also operates one of the world’s leading counterparty clearing providers, CME Clearing.
Companies worth $10 billion or more are generally described as “large-cap stocks,” CME fits right into that category, signifying its substantial size, stability, and dominance in its industry. The company offers futures and options on futures trading through the CME Globex platform, fixed-income trading via BrokerTec, and foreign exchange trading on the EBS platform.
The world’s largest futures exchange has fallen 12.2% from its 52-week high of $223.80, which it hit on Dec. 4, 2023. Shares of CME are down 9.6% over the past three months, underperforming the broader S&P 500 Index’s ($SPX) 7% gains over the same time frame.
Longer term, CME shares have risen 6.8% over the past year, but in 2024, the stock is down 6.7%. By contrast, the SPX is up 14.8% on a YTD basis and 24.1% over the past 52 weeks.
To confirm the recent bearish price trend, CME has been trading below its 50-day and 200-day moving averages since late May.
CME’s Q1 revenue and adjusted EPS beat Wall Street estimates thanks to the jump in commodities trading and the strength of U.S. Treasury futures and options trading. The company’s revenue was $1.49 billion, surpassing the consensus estimate of $1.48 billion. Its adjusted EPS was $2.50, beating Wall Street expectations of $2.44. Since reporting its Q1 results on Apr. 24, the stock has been on a downtrend.
Rival Intercontinental Exchange, Inc. (ICE) has outperformed CME with 22% gains in the past 52 weeks and a 6.1% increase on a YTD basis.
Despite its recent underperformance compared to SPX, analysts are optimistic about CME’s prospects. The stock has a consensus rating of “Moderate Buy” from the 16 analysts covering it, and the mean price target of $224.73 is a premium of 14.3% to current levels.
On the date of publication, Dipanjan Banchur did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
