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CME Group (NASDAQ: CME) is scheduled to report its fiscal Q4 2022 results on Wednesday, February 8, 2023. We expect CME Group
Our forecast indicates that CME Group’s valuation is $206 per share, which is 16% above the current market price of $177. Our interactive dashboard analysis on CME Group’s Earnings Preview has more details.
(1) Revenues to remain marginally above the consensus estimates
CME Group’s revenues grew 8% y-o-y to $3.8 billion in the first three quarters of 2022. It was mainly driven by a 12% rise in the clearing & transaction fees (trading-driven revenues), followed by a 5% improvement in the market data & information services stream.
- The total non-trading income decreased 11% y-o-y to $650 million over the first nine months of 2022. We expect the same trend to continue in Q4.
- The clearing & transaction fees, which contribute close to 80% of the total revenues, increased by 12% over the same period. The growth was due to a higher average daily volume. We expect the same momentum to continue in Q4.
- Overall, CME Group’s revenues are forecast to touch $5.04 billion in FY2022.
Trefis estimates CME Group’s fiscal Q4 2022 revenues to be around $1.23 billion, slightly above the $1.21 billion consensus estimate.
(2) EPS to edge past the consensus estimates
CME Group Q4 2022 adjusted earnings per share is expected to be $1.92 per Trefis analysis, 2% above the consensus estimate of $1.88. The company’s adjusted net income marginally increased to $2.03 billion in the first nine months of 2022. It was due to lower non-operating income and a slight increase in the effective tax rate. We expect the fourth-quarter results to be on similar lines. Overall, the CME group’s annual GAAP EPS is likely to remain around $7.99 for FY2022.
(3) Stock price estimate is 16% higher than the current market price
We arrive at CME Group’s valuation, using a GAAP EPS estimate of around $7.99 and a P/E multiple of just below 26x in fiscal 2022. This translates into a price of $206, which is 16% above the current market price of around $177.
Note: P/E Multiples are based on Share Price at the end of the year and reported (or expected) Adjusted Earnings for the full year
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