Wall Street Zen Upgrades CME Group (NASDAQ:CME) to "Sell"

Key Points

• Wall Street Zen upgraded CME Group from “strong sell” to “sell,” while the broader analyst consensus remains “Hold” with an average price target of $289.81.
• CME Group’s latest quarter exceeded expectations, with EPS of $2.99 versus the $2.91 consensus and revenue of $1.71 billion; record trading volumes also support its revenue outlook.
• The stock traded at $263.14, below its 50- and 200-day moving averages, while insider selling and concerns that the valuation already reflects future growth add pressure to the investment case.

CME Group (NASDAQ:CME - Get Free Report) was upgraded by stock analysts at Wall Street Zen from a "strong sell" rating to a "sell" rating in a research report issued on Saturday, Wall Street Zen reports.

Several other research analysts have also issued reports on CME. Bank of America increased their price target on shares of CME Group from $226.00 to $230.00 and gave the stock an "underperform" rating in a research report on Thursday, July 23rd. Morgan Stanley upped their price objective on CME Group from $324.00 to $330.00 and gave the company an "overweight" rating in a research note on Thursday, July 23rd. Erste Group Bank cut CME Group from a "buy" rating to a "hold" rating in a report on Friday, June 5th. UBS Group cut their target price on CME Group from $310.00 to $260.00 and set a "buy" rating for the company in a research report on Monday, July 6th. Finally, Weiss Ratings lowered CME Group from a "buy (b-)" rating to a "hold (c+)" rating in a research note on Tuesday, August 11th. Nine equities research analysts have rated the stock with a Buy rating, six have given a Hold rating and three have assigned a Sell rating to the company. According to MarketBeat, the company currently has an average rating of "Hold" and a consensus target price of $289.81.

CME Group Trading Down 0.7%

Shares of CME Group stock opened at $263.14 on Friday. The firm has a market capitalization of $94.62 billion, a PE ratio of 22.32, a price-to-earnings-growth ratio of 3.13 and a beta of 0.24. The company has a debt-to-equity ratio of 0.13, a current ratio of 1.02 and a quick ratio of 1.02. The company's fifty day moving average price is $271.04 and its two-hundred day moving average price is $272.56. CME Group has a 52-week low of $218.31 and a 52-week high of $329.16.

CME Group (NASDAQ:CME - Get Free Report) last released its quarterly earnings data on Wednesday, July 22nd. The financial services provider reported $2.99 EPS for the quarter, topping analysts' consensus estimates of $2.91 by $0.08. CME Group had a net margin of 63.30% and a return on equity of 15.60%. The company had revenue of $1.71 billion during the quarter, compared to the consensus estimate of $1.68 billion. During the same period last year, the firm earned $2.96 EPS. The firm's revenue for the quarter was up .8% compared to the same quarter last year. On average, analysts expect that CME Group will post 12.27 EPS for the current year.

Insider Transactions at CME Group

In related news, Director Elizabeth A. Cook sold 500 shares of the company's stock in a transaction dated Monday, September 14th. The shares were sold at an average price of $280.11, for a total transaction of $140,055.00. Following the transaction, the director owned 17,916 shares in the company, valued at $5,018,450.76. This represents a 2.72% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at the SEC website. Also, CEO Terrence A. Duffy sold 15,000 shares of the stock in a transaction dated Thursday, September 10th. The stock was sold at an average price of $274.44, for a total transaction of $4,116,600.00. Following the sale, the chief executive officer directly owned 40,630 shares in the company, valued at approximately $11,150,497.20. This represents a 26.96% decrease in their position. The disclosure for this sale is available in the SEC filing. Company insiders own 0.30% of the company's stock.

Hedge Funds Weigh In On CME Group

A number of large investors have recently modified their holdings of CME. First Citizens Financial Corp acquired a new stake in shares of CME Group in the third quarter valued at approximately $888,000. CX Institutional lifted its holdings in CME Group by 137.1% during the 3rd quarter. CX Institutional now owns 5,354 shares of the financial services provider's stock worth $1,403,000 after buying an additional 3,096 shares in the last quarter. Planning Strategies Inc. lifted its holdings in CME Group by 1,528.6% during the 3rd quarter. Planning Strategies Inc. now owns 228 shares of the financial services provider's stock worth $60,000 after buying an additional 214 shares in the last quarter. Burkett Financial Services LLC bought a new position in CME Group in the 3rd quarter valued at $62,000. Finally, Envestnet Portfolio Solutions Inc. boosted its position in CME Group by 16.6% in the 2nd quarter. Envestnet Portfolio Solutions Inc. now owns 70,325 shares of the financial services provider's stock valued at $14,809,000 after buying an additional 10,005 shares during the last quarter. 87.75% of the stock is currently owned by institutional investors and hedge funds.

Key CME Group News

Here are the key news stories impacting CME Group this week:

• Positive Sentiment: Record trading activity supports revenue prospects: CME Group reported September and third-quarter average daily volume records, with ADV rising 22% year over year in September and 16% for the quarter. Higher volumes generally increase clearing and transaction revenue. CME Group Sets September, Q3 Average Daily Volume Records
• Positive Sentiment: Strong soybean futures participation: CME Group set a new open-interest record in soybean futures, indicating continued engagement in agricultural derivatives and supporting the exchange’s diversified volume base. CME Group Sets New Open Interest Record in Soybean Futures
• Positive Sentiment: Third-quarter earnings expectations remain favorable: Analysts anticipate low double-digit bottom-line growth when CME Group reports third-quarter results later this month, helped by the elevated trading volumes. What You Need to Know Ahead of CME Group's Earnings Release
• Neutral Sentiment: Investor commentary highlights a volume-versus-price disconnect: Cambiar Investors’ quarterly letter discussed CME Group as a potential addition on weakness, noting that record trading activity has not translated into comparable stock performance. This may attract value-oriented investors but also underscores market hesitation. CME Group Adding on Weakness
• Negative Sentiment: Valuation may limit near-term upside: An analysis asked whether CME Group is fully priced following its push into cryptocurrency futures, suggesting investors may need additional growth or execution evidence to justify further appreciation. Is CME Group Fully Priced After Its Crypto Futures Push?
• Negative Sentiment: Analyst rating adds pressure: Wall Street analysts recently assigned CME Group a “Hold” rating, reinforcing the view that the stock’s strong operating performance may already be reflected in its valuation. CME Group Stock Rated Hold

CME Group Company Profile

CME Group Inc operates global derivatives marketplaces that enable customers to manage risk and trade futures and options contracts. Its exchanges offer products linked to interest rates, equity indexes, foreign currencies, agricultural commodities, energy, metals and other asset classes.

The company also provides central counterparty clearing, settlement and related risk-management services for transactions conducted on its markets. In addition, CME Group offers market data, benchmark products and technology services that support trading, analysis and connectivity for financial institutions, businesses, professional traders and other market participants.

CME Group's history includes the Chicago Board of Trade, founded in 1848, and the Chicago Mercantile Exchange, established in 1898.

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