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MARKETS LIVE BLOG:

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Tesla shares jump after EV maker vows to speed up launch of more affordable models

CME Group (CME) to Report Q1 Earnings: What's in the Cards?

Zacks Equity Research

CME Group Inc. CME is slated to report first-quarter 2020 results on Apr 29, before market open.

The Zacks Consensus Estimate for the to-be-reported quarter’s earnings stands at $2.23, implying nearly 37.6% increase from the year-earlier reported figure.

The company’s earnings surpassed estimates in three of the last four quarters, the average positive surprise being 2.27%.

Let’s see how things have shaped up for the upcoming announcement.

CME Group’s top line is likely to have benefited from higher market data and information services, non-transaction related opportunities and over-the-counter offerings. Higher clearing and transaction fees as well as access and communication fees are likely to have aided the upside. The Zacks Consensus Estimate for revenues is pegged at $1.5 billion, indicating 27.3% increase from the year-ago reported figure.

The company boasts a premier position with about 90% market share of the global futures trading and clearing services. The Zacks Consensus Estimate for clearing and transaction fees is currently pegged at $1.3 billion, indicating 32.4% increase from the year-ago period reported figure.

CME reported solid first-quarter 2020 average daily volumes (“ADV”). The quarter recorded ADV of 27 million contracts, up 45% from first-quarter 2019.

Energy volume of 3.2 million contracts increased 38% from first-quarter 2019. Interest rate volume of 13.8 million contracts per day increased 34% while Equity index volume of 6.5 million contracts per day increased 106%. Metals volume of 0.9 million contracts per day increased 58% whereas Foreign exchange volumes rose 22% to 1.1 million contracts per day. Agricultural volume of 1.5 million contracts per day increased 9% from first-quarter 2019. The Zacks Consensus Estimate for average daily volume (including Nymex and Comex) indicates 44.8% improvement from the year-ago reported number.

Moreover, expenses are likely to have shot up due to higher compensation and benefits, technology expenses, professional fees and outside services, licensing and other fee agreements plus depreciation and amortization costs. CME Group expects adjusted operating expenses, excluding license fees, in the range of $1.64 billion and $1.65 billion in 2020.

The company is likely to have benefited from solid cash flow in the quarter under review.

Continued capital deployment in the first quarter is likely to have provided additional boost to the bottom line.

What Our Quantitative Model States

Our proven model does not conclusively predict an earnings beat for CME Group 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 a positive surprise. But that’s not the case here.

Earnings ESP: CME Group has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are both pegged at $2.23. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

CME Group Inc. Price and EPS Surprise

CME Group Inc. Price and EPS Surprise
CME Group Inc. Price and EPS Surprise

CME Group Inc. price-eps-surprise | CME Group Inc. Quote

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Zacks Rank: CME Group carries a Zacks Rank #3.

Stocks to Consider

Some stocks from the broader finance sector with the apt combination of elements to surpass estimates this reporting cycle are as follows:

AssetMark Financial Holdings, Inc. AMK is slated to announce first-quarter earnings on May 5. The stock has an Earnings ESP of +7.41% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Green Dot Corporation GDOT is slated to report first-quarter earnings on May 13. It has a Zacks Rank #3 and an Earnings ESP of +1.08%.

Thunder Bridge Acquisition, Ltd. RPAY is set to report first-quarter earnings on May 20. The company has a Zacks Rank of 3 and an Earnings ESP of +2.27%.

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CME Group Inc. (CME) : Free Stock Analysis Report
 
Green Dot Corporation (GDOT) : Free Stock Analysis Report
 
Thunder Bridge Acquisition, Ltd. (RPAY) : Free Stock Analysis Report
 
AssetMark Financial Holdings, Inc. (AMK) : Free Stock Analysis Report
 
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