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CME – Market expectations are for Uniform ROA to reach new peaks, but management may have concerns about macroeconomic headwinds, their Google partnership, and business line growth

March 10, 2022

  • CME Group Inc. (CME) currently trades above corporate and near recent averages relative to Uniform earnings, with a 33.3x Uniform P/E (Fwd. V/E’).
  • At these levels, markets are pricing in expectations for Uniform ROA to reach new peaks of 83%, accompanied by 3% Uniform asset growth.

  • Meanwhile, analysts expect Uniform ROA to improve to 53% in 2022, accompanied by 11% Uniform asset growth.

  • If sustained going forward, these levels would imply a stock price closer to $208, representing approximately 15% equity downside for the firm.

  • Moreover, the firm’s most recent earnings call suggests management may have concerns about macroeconomic headwinds, their Google partnership, and business line growth.

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