The S&P 500 has dropped 18% over the same time period, while CME Group’s stock has lost 9% YTD (NASDAQ: CME). Additionally, its share price of $209 is currently trading 14% below Trefis’ estimate of CME Group’s fair value of $243.
In every one of the company’s four 2021 quarters, performance was better than the consensus projections. The same pattern persisted in the first quarter of 2022 as well, with total average daily volume rising by 19% year over year. Higher equity indexes and interest rate contracts were the main drivers. In total, adjusted net income rose 22% year over year to $702 million.
The company recently released its second-quarter market statistics, showing an increase in total average daily volume of 25% year over year. It was primarily fueled by an increase in equity index ADV of 57%, which was followed by increases in interest rate and foreign exchange ADV of each 24%. Due to recent market volatility brought on by record-high inflation rates, aggressive interest rate hikes by central banks around the world, and geopolitical tensions, there was a higher volume in the first half of 2022. Higher trading volumes are anticipated to help the top line in Q2. Overall, $1.23 billion and $1.91 are the estimated net revenues and earnings for the second quarter, respectively.
CME Group’s 2021 $4.7 billion in CME net revenues represented a 4% year-over-year decline. In FY2022, we predict that CME Group revenues will reach $5.1 billion. Additionally, CME’s adjusted net income for the year is forecast to increase by 10% year over year to $2.9 billion. This will result in a valuation of $243 when combined with an EPS of $8.05 per year and a P/E multiple of just over 30x ZRX.
You can view our past coverage of CME Group stock here to follow the evolution of our opinion.
CME Group has experienced a 9 percent decline this year as a result of rising inflation and Fed interest rate increases. Can it fall further? Compare the decline of CME Group stock during previous market crashes to determine how low it can go. Here is a list of every stock’s performance during previous market crashes.
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