Analyst Note| Michael Miller |
Wide-moat CME group reported decent second-quarter earnings, with EPS of $1.64 coming in roughly in line with the FactSet consensus estimate of $1.61. Revenue was effectively unchanged from the prior-year prior period with reported results of $1.18 billion. Sequentially, revenue decreased 6%, driven primarily by falling equity and interest rate futures trading volume. Despite lower levels of activity, equity futures trading volume is still at a healthy level. Interest rates futures trading volume was below its historical average, a symptom of low interest rates, but still well above the 2020 lows. Based on these results, we are maintaining our $193 fair value estimate for CME.