Cboe Global (CBOE) Stock Hits 52-Week High: What Lies Ahead?
Shares of Cboe Global Markets CBOE scaled a 52-week high of $120.00 in the last trading session, closing at $118.04, up 4.1%. Strong market position, global reach and strength in its proprietary products are likely to have driven the stock’s rally.
Last week, Cboe Global announced its intention to launch Cboe LIS powered by BIDS in Canada. Its equities block trading network will now be available beyond the United States and Europe.
Over a year’s time, the stock has gained 23.2% compared with its industry’s increase of 22.9%.
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Can it Retain the Bull Run?
One of the largest stock exchange operators by volume in the United States and a leading market globally for ETP trading, Cboe Global Markets boasts strength in its proprietary products. The company is exploring new markets like the Middle East, Scandinavia and Asia, while pursuing jurisdictional approval in more established markets, including Switzerland and Israel. The company plans to invest approximately $25 million in organic growth initiatives in 2021.
Cboe Global estimates recurring non-transactional organic revenue growth of 10-11% in 2021 (upped from 6-7% guided earlier). Access and capacity fees plus proprietary market data are expected to increase 7% to 8% in 2021. Longer to mid-term, the company estimates organic top line compounded average growth of 4% to 6%.
Cboe Global ventured into Canada with the buyout of MATCHNow in August 2020. This Zacks Rank #3(Hold) company acquired BIDS Trading in January 2021 to provide a meaningful presence in the substantial off-exchange segment of the U.S. equities market. It has also inked a deal to acquire Chi-X Asia Pacific Holdings in a bid to expand its global equities business into the Asia Pacific region. The company thus estimates net revenue contribution from recent acquisitions in the range of 4% to 6%.
Cboe Global enjoys strong liquidity position that mitigates balance sheet risks and paves the way for an accelerated capital deployment. It has hiked dividend each year since its IPO, and increased the same at a five-year CAGR of 13%. The board of directors authorized up to an additional $200 million for its share repurchase program.
Over the past 60 days, the stock has seen 2021 and 2022 earnings estimate move 3.1% and 1.8% north, respectively to $5.38 and $5.51 per share.
Stocks to Consider
Some better-ranked stocks from the finance sector are OTC Markets Group Inc. OTCM, Cincinnati Financial Corporation CINF and HCI Group HCI, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
OTC Markets delivered an earnings surprise of 46.15% in the last-reported quarter.
Cincinnati Financial delivered an earnings surprise of 30.48% in the last-reported quarter.
HCI Group delivered an earnings surprise of 28.33% in the last-reported quarter.
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