Cboe Global Markets (CBOE) Receives a Bullish Upgrade from Deutsche Bank
Deutsche Bank analyst Brian Bedell has delivered a positive outlook for Cboe Global Markets, upgrading the company’s stock to a Buy rating and raising the price target to $222. This optimistic assessment is driven by the analyst’s belief that Cboe will maintain strong revenue growth through at least 2025.
Bedell’s bullish stance is rooted in several factors, including the expectation of continued volatility in equity markets, especially in the wake of the U.S. elections. This volatility is expected to fuel demand for index and volatility options and futures. Furthermore, Bedell anticipates robust organic growth propelled by ongoing product innovation and the rising adoption of options, particularly with the upcoming launch of index options on Robinhood.
The analyst also projects that stronger revenue growth will translate into positive operating leverage in the coming year, enabling Cboe’s management to surpass their stated goals for operating margin stability. This projection aligns with the company’s recent third-quarter earnings call, where they reported adjusted EPS of $2.22, exceeding the $2.19 estimate, and sales of $532.0 million, outperforming the expected $530.8 million.
Bedell’s updated forecasts are optimistic, predicting 8% revenue growth in 2025 and 6% growth in 2026, up from previous estimates of 6% and 3%, respectively. He anticipates that Cboe’s robust growth in index product revenue, which surged 55% and 35% in 2022 and 2023, will continue with at least 10% growth in 2025, despite challenging comparisons and high volume levels.
Investing Opportunities:
Investors seeking exposure to Cboe can consider the following exchange-traded funds (ETFs):
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Listed Funds Trust Horizon Kinetics Blockchain Development ETF (BCDF)
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iShares U.S. Broker-Dealers & Securities Exchanges ETF (IAI)
Cboe’s Share Price:
As of Monday’s last check, CBOE shares were up 1.88% at $200.56.
