CME Group Inc. (CME): A Value Gem With Upside Catalysts

A handful of technical analysis tools are suggesting that CME Group Inc. (NASDAQ:CME) overall gets 96% Sell rating. The stock is also flashing a Sell from the Barchart TrendSpotter trading system. Traders hoping to speculate on the CME’s short-term trajectory should know that short terms indicators for the stock averaged 80% Sell with an average daily trading volume over the past 20 days at 2076860 shares. CME stock has overall a 1% Sell signal considering medium term indicators and the 50-day average daily volume remained almost 1859918 shares. It’s also worth noting that the stock, whose average daily volume over the 100 days prior to this writing was 2085378 shares, is 100% Sell on the basis of long term indicators.

The share price is currently staying around the first support level of $166.98. Below this, the next support is placed in the zone of $165.52. Till the time, the CME stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 31.24 on daily chart, which may remain a cause for comfort. If the price breaks below $165.52 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $169.79 mark may result into a pull-back move towards $171.14 level.

CME Group Inc. (CME) is projected to climb by 16.53 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $220-month high price target. This represents a whopping 30.62 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $197.5, which represents a return potential of 17.26 percent when compared to the closing price of the stock of $168.43 on Thursday, March 14. The lowest price target for the stock is $164 — slightly more than -2.63 percent from CME’s current share price.

Here’s a rundown of insider trading activity for sense of CME Group Inc. (NASDAQ:CME).

CME shares dropped -1.26 points or -0.74 percent on Thursday to $168.43 with a heavy trade volume of 2.413 million shares. After opening the session at $169.5, the shares went as high as $169.69 and as low as $166.88, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $60.6 billion and now has 359.8 million shares outstanding. CME Group Inc. (CME) stock has lost -5.87 percent of market value in 21 trading days.

Analysts at JP Morgan cut their rating on shares of CME Group Inc. (NASDAQ:CME) from Neutral to Underweight in their opinion released on February 15. BofA/Merrill analysts have downgraded their rating of CME stock from Buy to Neutral in a separate flash note to investors on January 11.

CME stock has a trailing 3-year beta of 0.34, offering the possibility of a lower rate of return, but also posing less risk. The portion of a company’s profit allocated to each outstanding share of common stock was $5.72 a share in the trailing twelve months. The stock’s value has fallen -10.47 percent year to date (YTD) against a rise of 3.19 percent in 12 month’s time. The company’s shares still trade -13.71 percent away from its 1-year high of $195.19 and 10.5 percent up from 52-week low of $152.42. The average consensus rating on the company is 2.4, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

Shares of CME Group Inc. (CME) are trading at a P/E ratio of 29.67 times earnings reported for the past 12 months. The industry CME operates in has an average P/E of 23.29. Its P/E ratio went as low as 12.42X and as high as 32.96 over the 5-year span. Further, it is sporting a 14.06 on the Price-to-Sales ratio. Compare this with the industry average P/S of 10.05. 0 percent is the gross profit margin for CME Group Inc. and operating margin sits at 60.5 percent. Along with this, the net profit margin is 45.5 percent.

CME will be declaring its Q1 financial results. Analysts are forecasting revenue to climb 8.6 percent to $1.2B in the next fiscal quarter, while earnings are seen soaring by nearly -11.29 percent to $1.65 per share. History has shown that shares in CME Group Inc. have gone up on 18 different earnings reaction days and are predicted to add 0.02 percent when the company reports upcoming earnings. In last reported earnings results, it earned $1.77 per share, better than the $1.72, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $1.24B, better than the $1.2B analysts expected. Earnings are estimated to increase by 32.7 percent this year, 10.36 percent next year and continue to increase by 9.22 percent annually for the next 5 years.