CME Group (CME.US) and CBOE Global Markets (CBOE.US) are among the leading providers of financial instruments, primarily for institutional investors in the United States. Shares of both companies have performed very well during the recent market downturns, thanks to exceptionally high trading activity across multiple markets. However, Bank of America downgraded its recommendation for CBOE from "Buy" to "Neutral," while Morgan Stanley raised its price target for CME Group to $301 per share from $263 previously, implying an upside of around 20% from current levels.
- CME operates the Chicago Board of Trade (CBOT), the New York Mercantile Exchange (NYMEX) for energy, and the Commodity Exchange (COMEX) for metals, with strong exposure to futures contracts on the S&P 500, Bitcoin, and options linked to the bond market.
- CBOE is best known for its exposure to equity index options (as the operator of the largest U.S. options exchange, CBOE Options Exchange), single stock options, and the CBOE Volatility Index (VIX).
During times of market uncertainty, demand for hedging and record trading volumes have helped both companies remain largely immune to stock market declines on Wall Street. Additionally, the ongoing trade war has fueled strong hedging activity in the commodity markets (gold, agricultural goods), which mainly supports CME Group.
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Commenting on CME Group, Morgan Stanley analysts pointed to the company’s "business moat" in options and commodities markets, highlighting that 80% of its revenue comes from commissions and clearing fees. Trading volumes in 2025 and 2026 are expected to exceed the average annual growth rate of 7%, with volume growth of 15% this year and 12% next year, supporting CME’s business outlook.
Over the past 12 months, CME’s revenue has grown to $6.12 billion, and in the last quarter, the company reported record average daily trading volumes of 29.8 million contracts, with 9.2 million contracts related to U.S. bond options. Morgan Stanley also cited CME’s encouraging countercyclical business model, which allows the firm to demonstrate resilience during periods of market turbulence.
Meanwhile, Bank of America lowered its price target for CBOE to $227, citing the potential for lower trading volumes in the second half of 2025 as well as in 2026 and 2027. BofA values CBOE at 20 times estimated 2027 earnings. The new earnings forecasts for the second half of this year are $4.60 per share versus $5.07 previously, and $9.89 and $11.37 for 2026 and 2027 respectively, down from $11.16 and $12.99.
CBOE Global Markets (D1) and CME Group (D1) Shares
CBOE Global Markets’ shares have fallen nearly 12% from historical highs and are currently testing the 200-day EMA.
The company appears to have a business model less resilient than CME’s, although strong interest and recent volatility in the VIX index may help support CBOE’s performance.
Source: xStation5
CME Group shares are performing significantly better, with declines stopping at the 50-day EMA and the 23.6% Fibonacci retracement of the 2024 upward wave. The company has been paying a dividend for 23 years, with a current dividend yield of 4.2%. Analysts at UBS and Raymond James maintain price targets of $290 and $287 per share, respectively.
Source: xStation5
Source: XTB Research, Bloomberg Finance L.P.
Source: XTB Research, Bloomberg Finance L.P.
Source: XTB Research, Bloomberg Finance L.P.Source: XTB Research, Bloomberg Finance L.P.
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