Cboe Global Markets ’ CBOE increased medium-term target, strong market position, global reach, strength in its proprietary products, solid capital position, effective capital deployment along with favorable growth estimates make it worth retaining in one’s portfolio.
This largest stock exchange operator by volume in the United States and a leading market globally for ETP trading has a decent track record of beating earnings estimates in three of the last four quarters.
Zacks Rank & Price Performance
Cboe Global currently carries a Zacks Rank #3 (Hold). Year to date, the stock has lost 7.7% compared with the industry’s decrease of 30.9%.
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Growth Projections
The Zacks Consensus Estimate for Cboe Global’s 2022 earnings is pegged at $6.40, indicating a 5.8% increase from the year-ago reported figure on 13% higher revenues of $1.7 billion. The consensus estimate for 2023 earnings is pegged at $6.61, indicating a 3.2% increase from the year-ago reported figure on 5.5% higher revenues of $1.8 billion.
Return on Equity
Return on equity was 18.9% in the trailing twelve months, better than the industry average of 13.5%.
Estimate Revision
The Zacks Consensus Estimate for 2022 has moved north by 1.3%, while the consensus estimate for 2023 has moved 0.5% in the past 60 days, reflecting analyst optimism.
Growth Drivers
CBOE Global’s growth strategy revolves around expanding its product, broadening its geographic reach to the highest value markets, diversifying its business mix with recurring revenues, ramping up growth with recurring non-transaction revenues and leveraging technology.
CBOE Global expects to deliver total net revenue growth of 9% to 11% in 2022, up from 5-7% annually guided earlier. Cboe Global expects organic net revenues from Data and Access Solutions to increase approximately 10% to 13% in 2022, up from the earlier guidance of 8% to 11%. For the mid-to-long term, CBOE estimates organic top-line compounded average growth of 4% to 6%.
Cboe Global Markets boasts a compelling inorganic growth story and projects inorganic net revenue growth to be 9% to 11% in 2022. The Bats Global buyout expanded and diversified its portfolio, MATCHNow helped it venture into Canada. BIDS Trading provided a meaningful presence in the substantial off-exchange segment of the U.S. equities market, while Chi-X Asia Pacific Holdings expanded its global equities business into the Asia Pacific region. CBOE estimates acquisitions held less than a year to add 2% to 3% to total net revenue growth in 2022.
Given a strong liquidity position, Cboe Global engages in effective capital deployment. CBOE has hiked its dividend each year since its IPO and increased the same for 11 consecutive years. Also, as of Jun 30, 2022, CBOE had $233 million remaining under its existing share repurchase authorization.
Stocks to Consider
Some better-ranked stocks from the finance sector are Arch Capital Group Ltd . ACGL, American Financial Group, Inc . AFG and ProAssurance Corporation PRA, each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The bottom line of Arch Capital surpassed earnings estimates in three of the last four quarters and missed in one, the average being 33.64%. Year to date, the insurer has rallied 4.6%.
The Zacks Consensus Estimate for Arch Capital’s 2022 and 2023 earnings has moved 5.7% and 4.9% north, respectively, in the past 30 days.
American Financial’s earnings surpassed estimates in each of the last four quarters, the average beat being 37.09%. Year to date, American Financial has lost 4.1%.
The Zacks Consensus Estimate for AFG’s 2022 and 2023 earnings has moved 3.1% and 3.3% north, respectively, in the past 30 days.
The bottom line of ProAssurance surpassed earnings estimates in three of the last four quarters and missed in one, the average being 150.9%. Year to date, the insurer has lost 12.7%.
The Zacks Consensus Estimate for ProAssurance’s 2022 and 2023 earnings has moved 25.9% and 13.9% north, respectively, in the past 30 days.
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ProAssurance Corporation (PRA) : Free Stock Analysis Report
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