Is CME Group Stock Fairly Priced?

SectorFinancial Markets
CountryMiddle east

Share to Linkedin CME Group stock (NASDAQ: CME), the world’s largest financial derivatives exchange, gained roughly 18% – increasing from about $182 at the beginning of 2021 to around $216 currently, outperforming the S&P500, which grew 12% over the same period. The exchange has surpassed the consensus estimates over the last two quarters, mainly driven by strong ADV (average daily volume) growth on a sequential basis. This has led to positive investor interest in the stock.

There were two main reasons behind the rise in ADV on a sequential basis: First, the approval of the $1. 9 trillion stimulus package. Second, the increase in retail investor participation. But is this all there is to the story? Not quite, despite the recent gains, Trefis estimates CME Group’s valuation to be around $212 per share – slightly below the current market price, based on a key opportunity and one risk factor. The opportunity we see is an improved trajectory for CME Group’ more...