What changed
$CME — Operates the world's largest derivatives exchange.
🎯 Q1 FY26 | Rev $2B | EPS $3.36 vs $3.37 🔴 | Margin 69.7%
💡 Consensus expects continued strong volume growth driven by macro volatility, but the market may be underestimating the risk of normalization in interest rate and energy derivatives volumes as central bank policy stabilizes.
🏢 Business Quality: 9/10 | Valuation: rich
📉 Reward/Risk: Upside 5% to $270 (consensus target) vs downside 15% to $218 (22x normalized EPS of $9.90). Ratio: 0.33x, unfavorable.
🔮 Catalyst: Next earnings (late July 2026): Q2 2026 average daily volume and revenue guidance. Key metric: ADV in interest rate and energy contracts. Failure signal: ADV below 30 million contracts or guidance for Q3 below consensus.
💰 Entry: Current price $255.94 is not attractive. Ideal entry below $230 (22x trailing EPS) to build a margin of safety.
Also in play: $ICE $NDAQ $CME $CBOE $MCO $ORCL