Yahoo Finance Cboe Global (CBOE) Stock Up 6% YTD: Will the Rally Continue?
Cboe Global Market’s CBOE shares have gained 5.6% year to date, outperforming the industry’s increase of 4.3%. The Finance sector has declined 1.5% in the said time frame. With a market capitalization of $14 billion, the average volume of shares traded in the last three months was about 0.7 million.
Strong market position, global reach, strength in its proprietary products and solid capital position continue to drive this Zacks Rank #3 (Hold) securities and exchange company.
It is one of the largest stock exchange operators by volume in the United States and a leading market globally for ETP trading. CBOE has a decent history of delivering earnings surprises in three of the last four reported quarters. Its earnings grew 13.7% in the last five years, better than the industry average of 10.5%.
Cboe Global’s ROE for the trailing 12 months was 22.3%, better than the industry average of 10.8%. It has a VGM Score of B. The VGM Score rates stocks on their combined weighted styles, helping to identify those with the most attractive value, best growth, and most promising momentum.
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Can It Retain the Bull Run?
The Zacks Consensus Estimate for Cboe Global’s 2023 earnings is pegged at $7.18, indicating a 3.6% increase from the year-ago reported figure on 8.3% higher revenues of $1.9 billion. The consensus estimate for 2024 is pegged at $7.43, indicating a year-over-year improvement of 3.6% on 3.5% higher revenues of $2 billion. It has a Growth Score of A. The Growth Style Score analyzes the growth prospects of a company.
Its wide geographic reach to the highest-value markets, a diversified business mix with recurring revenues, ramp-up of growth with recurring non-transaction revenues and technology leverage should continue to boost operational performance and fuel the top line. For the mid-to-long term, CBOE estimates organic top-line compound average growth of 4% to 6%.
Organic growth remained a key strength at Cboe Global Markets, as reflected in its revenue growth story. A volatile market continues to aid trading volume. CBOE estimates organic total net revenue growth between 7% and 9% in 2023.
Cboe Global Markets has an impressive inorganic growth story. 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. The acquisition of ErisX enables Cboe to enter the digital asset spot and derivatives marketplaces through a digital-first platform, developed with industry partners to focus on robust regulatory compliance, data and transparency.
Cboe Global Markets expects acquisitions held less than a year to add around 0.5% to total net revenue growth in 2023.
Banking on operational excellence, CBOE increased dividends for 12 straight years as well as pursued share buybacks. As of Mar 31, 2023, CBOE had $147.9 million left under its current share repurchase authorization.
The Zacks Consensus Estimate for 2023 and 2024 has moved 0.3% and 0.4% north, respectively in the past 30 days, reflecting analyst optimism.
Stocks to Consider
Some better-ranked stocks from the finance sector are RLI Corporation RLI, Kinsale Capital Group KNSL and CME Group CME.
RLI delivered a four-quarter average earnings surprise of 43.50%. Year to date, the insurer has lost 1.8%.
The Zacks Consensus Estimate for RLI’s 2023 earnings indicates a year-over-year increase of 4.1%. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Kinsale delivered a four-quarter average earnings surprise of 14.77%. Year to date, the insurer has gained 23.8%.
The Zacks Consensus Estimate for KNSL’s 2023 and 2024 earnings indicates respective year-over-year increases of 32.9% and 19.7%. The company flaunts a Zacks Rank #1 at present.
CME delivered a four-quarter average earnings surprise of 2.20%. Year to date, the insurer has gained 5.1%.
The Zacks Consensus Estimate for CME’s 2023 and 2024 earnings indicates a year-over-year increase of 9.5% and 1.5%, respectively. It currently carries a Zacks Rank #2 (Buy).
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CME Group Inc. (CME) : Free Stock Analysis Report
RLI Corp. (RLI) : Free Stock Analysis Report
Cboe Global Markets, Inc. (CBOE) : Free Stock Analysis Report
Kinsale Capital Group, Inc. (KNSL) : Free Stock Analysis Report
