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Cboe Global (CBOE) to Report Q3 Earnings: What's in Store?

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Zacks Equity Research
·4 min read
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Cboe Global Markets, Inc. CBOE is slated to report third-quarter 2020 results on Oct 30, before the opening bell. The company has a trailing four-quarter earnings surprise of 8.04%, on average.

Factors to Consider

CBOE Global’s third-quarter performance is likely to have benefited from higher market data fees and access and capacity fees, partially offset by lower transactions fees and regulatory fees. The Zacks Consensus Estimate for third-quarter market data fees and access fees is pegged at $60 million and $58 million, indicating growth of 7.1% and 1.8%, respectively, from the prior-year quarter.

Market data revenues are likely to have been aided by the Bats, Hanweck and FT Options acquisition, improved Cboe Information Solutions, and the comprehensive suite of data solutions, analytics and indices.

Third-quarter results are likely to reflect higher trading volumes.

However, lower transaction fees, which are likely to reflect lower trading volumes in Options, U.S. Equities and Futures, might have weighed on the third-quarter top line. The consensus mark for third-quarter transaction fees is pegged at $333 million, indicating a decline of 28.5% from the prior-year quarter.

The Zacks Consensus Estimate for third-quarter revenues is pegged at $285 million, indicating a decline of 2.9% from the year-ago reported figure.

With respect to revenues per contract (RPC), Cboe Global estimates third-quarter Options RPC to be up 5% to 6% from the two months ended Aug 31 average, largely driven by 8-10% higher RPC projected for multi-listed options for September that in turn was driven by lower volume-related rebates. RPC for Futures is expected to be in line with the two-month ended Aug 31 average. The company estimates index RPC to decline slightly in the third quarter, reflecting the reversal of certain second quarter fee changes post the floor reopening.

Moreover, CBOE Global is likely to have benefited from strong proprietary products, particularly SPX index options and VIX Futures despite the COVID-19 induced market volatility.

Expenses are expected to have increased in the to-be-reported quarter as the company  intends to ramp up growth initiatives and complete Chicago headquarters build-out.

The Zacks Consensus Estimate for third-quarter earnings per share is pegged at $1.07, indicating a decline of 17.1% from the prior-year quarter.

Cboe Global Markets, Inc. Price and EPS Surprise

Cboe Global Markets, Inc. Price and EPS Surprise
Cboe Global Markets, Inc. Price and EPS Surprise

Cboe Global Markets, Inc. price-eps-surprise | Cboe Global Markets, Inc. Quote

What the Zacks Model Says

Our proven model does not conclusively predict an earnings beat for CBOE Global this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Earnings ESP: CBOE Global has an Earnings ESP of 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $1.07 per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: CBOE Global carries a Zacks Rank of 3.

Stocks to Consider

Some  stocks worth considering from the finance sector with a perfect mix of elements to surpass estimates in the upcoming quarterly releases are as follows:

Arch Capital Group ACGL has an Earnings ESP of +5.33% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Aflac AFL has an Earnings ESP of +3.46% and a Zacks Rank of 3.

Ares Management ARES has an Earnings ESP of +1.42% and a Zacks Rank #2.

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