Piper Sandler analyst Patrick Moley reiterated the Overweight rating on Cboe Global Markets, Inc. CBOE, raising the price target to $174 from $160.
With one day left in the quarter, the analyst expects CBOE to report its 5th consecutive record quarter for index options volumes and the 10th consecutive QoQ increase in volumes.
August & September are anticipated to be the two most vital volume months on record for SPX options, Moley notes.
The analyst adds that CBOE shares are up 3.1% since the former CEO resigned, contrasting with the decline of its average U.S. exchange peer and the S&P over the same period.
The analyst suspects the outperformance is due to investors pricing in greater odds of a potential sale following the loss of its long-time CEO.
Related: Cboe Global Markets' Chairman & CEO Edward Tilly Resigns Over Personal Relationships With Colleagues
For years, investors have viewed CBOE as an attractive takeout candidate with their exclusive license to trade the popular SPX & VIX derivatives products, notes the analyst. In 2021, media reports said the CME Group Inc CME approached CBOE with an offer, but CME denied the report.
That said, if a sale was to occur, the analyst believes CME is the most likely acquirer.
The analyst raised '23 / '24 EPS estimates from $7.10 / $7.31 to $7.21 / 7.55, respectively.
The 3Q23 estimate is increased by $0.03 to $1.80 due to continued outperformance in proprietary derivatives volumes.
Price Action: CBOE shares are trading lower by 0.32% to $155.90 on the last check Friday.
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