Analysts Are Updating Their CME Group Inc. (NASDAQ:CME) Estimates After Its First-Quarter Results

The quarterly results for CME Group Inc. (NASDAQ:CME) were released last week, making it a good time to revisit its performance. It was a credible result overall, with revenues of US$1.5b and statutory earnings per share of US$2.35 both in line with analyst estimates, showing that CME Group is executing in line with expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for CME Group

After the latest results, the 14 analysts covering CME Group are now predicting revenues of US$5.91b in 2024. If met, this would reflect a reasonable 5.3% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 8.5% to US$9.51. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$5.84b and earnings per share (EPS) of US$9.08 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

There's been no major changes to the consensus price target of US$226, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values CME Group at US$250 per share, while the most bearish prices it at US$187. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that CME Group's rate of growth is expected to accelerate meaningfully, with the forecast 7.1% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 2.6% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 6.7% per year. CME Group is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards CME Group following these results. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for CME Group going out to 2026, and you can see them free on our platform here.

Even so, be aware that CME Group is showing 1 warning sign in our investment analysis , you should know about...

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