William Blair analyst Jeff Schmitt has maintained their neutral stance on CBOE stock, giving a Hold rating on October 15.
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Jeff Schmitt’s rating is based on a combination of factors influencing Cboe Global Markets’ current and future performance. The company reported strong third-quarter results with adjusted EPS surpassing expectations due to robust revenue and expense management. Growth was observed across various business segments, notably in derivatives and cash markets, driven by increased volumes and market share, particularly in Europe. Additionally, the company is strategically refocusing on high-growth areas by exiting noncore markets, which is expected to positively impact EPS.
However, Schmitt notes that sustaining this momentum could be challenging due to tough comparisons, especially in derivatives and European markets. He anticipates a slowdown in derivatives growth to midsingle digits by 2026, which is significant given that derivatives constitute half of Cboe’s business mix. Consequently, EPS growth is projected to decline to 4% in 2026. Furthermore, the stock’s valuation at 23 times 2026 EPS, compared to a historical average of 22 times, suggests limited upside potential, justifying the Hold rating.
According to TipRanks, Schmitt is a 3-star analyst with an average return of 5.7% and a 60.00% success rate. Schmitt covers the Financial sector, focusing on stocks such as Marketaxess Holdings, Charles Schwab, and Tradeweb Markets.
In another report released on October 15, RBC Capital also maintained a Hold rating on the stock with a $254.00 price target.