On Friday, TD Cowen has maintained its Hold rating on CBOE Holdings (NYSE:CBOE), with a steady price target of $205.00. The firm's analysis followed the release of CBOE's September and third-quarter metrics, which showed mixed results across various segments, including derivatives, cash, and spot trading.
The report highlighted that despite the variances in the performance of different trading segments, the overall results seem to align with the firm's expectations, which are increasingly optimistic regarding CBOE's adjusted earnings per share (EPS) for the years 2024 and 2025. The metrics released by CBOE after the market closed on Thursday indicated a positive trajectory in the company's operations.
Despite the encouraging signs in CBOE's business performance, the stock price is currently aligned with the firm's 12-month target. This assessment comes even after applying an above-average forward twelve months (FTM) price-to-earnings (P/E) multiple to the company's stock valuation.
The analyst from TD Cowen expressed a sense of optimism in the direction of CBOE's earnings but noted that the current stock price reflects the firm's valuation over the next year. Consequently, the decision to retain the Hold rating on CBOE Holdings has been affirmed, suggesting that the firm does not foresee significant stock price movement in the near term.
CBOE Holdings' stock performance will continue to be monitored against the backdrop of the financial metrics and market conditions as they evolve. The Hold rating indicates a neutral perspective on the stock's potential for price appreciation or depreciation within the given timeframe.
In other recent news, Cboe Global Markets (NYSE:CBOE) has made several significant announcements. The company reported a 10% year-over-year increase in net revenue, reaching a record $514 million, and a 21% growth in adjusted diluted earnings per share to $2.15. Cboe has also increased its stock repurchase program by $500 million and raised its quarterly cash dividend to $0.63 per share.
Furthermore, Cboe is set to debut its S&P 500 variance futures in September, offering market participants tools to manage volatility risks. This comes alongside the introduction of options on VIX Futures in October, pending regulatory review.
The company also launched the Cboe 20+ Year Treasury Bond ETF Volatility Basis Point Index, a tool offering insights into expected U.S. Treasury market volatility. Analysts from Piper Sandler, JPMorgan, and Citi have adjusted their price targets for Cboe, with Piper Sandler raising their target to $210, while JPMorgan and Citi upgraded their targets to $195 and $200 respectively.
InvestingPro Insights
CBOE Holdings' recent performance aligns with TD Cowen's optimistic outlook on the company's future earnings. This sentiment is further supported by InvestingPro data, which shows that CBOE has maintained a strong financial position. The company's revenue for the last twelve months as of Q2 2024 stood at $3.81 billion, with a robust gross profit margin of 52.39% and an operating income margin of 29.56%.
InvestingPro Tips highlight that CBOE has raised its dividend for 9 consecutive years and has maintained dividend payments for 15 consecutive years. This consistent dividend policy underscores the company's financial stability and commitment to shareholder returns, which may be particularly appealing to income-focused investors in the current market environment.
Moreover, CBOE is trading near its 52-week high, with a strong return of 33.42% over the last three months. This performance reflects the market's positive sentiment towards the company, aligning with TD Cowen's hold rating and price target.
It's worth noting that CBOE is trading at a relatively high P/E ratio of 26.93, which may indicate that the stock is fully valued, consistent with TD Cowen's assessment. Investors seeking a more comprehensive analysis can access additional InvestingPro Tips, as there are 7 more tips available for CBOE on the InvestingPro platform.
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