CME - CME Group Q4 Earnings Preview: The Fortress In The Storm

2024-02-07 09:00:00 ET

Summary

• CME Group Inc. - the leading derivatives exchanges operator - will announce its fourth-quarter and full-year 2023 results on Wednesday, February 14, 2024 before the market opens.
• The fourth quarter was definitely a good one for CME, but I explain why I'm still not expecting a pronounced positive surprise next week.
• I also take a look at how CME Group will fare in a higher for longer interest rate scenario - my base case expectation as opposed to the current consensus.
• I also share an updated valuation and explain why I continue to add to my position in CME stock, despite the undeniably high earnings multiple.

Introduction

CME Group Inc. ( CME ) is a financial services company that is shunned by many investors because of its seemingly complex business model and high exposure to financial derivatives. I get the impression that many misunderstand the risks of the company (in particular in relation to its role as a central counterparty) and therefore avoid the company. Wrongly, in my view, because I consider CME to be an excellent compounder that is managed with prudence. In my previous articles on the company, I have explained why I think CME is a sensible addition to a well-diversified - or all-weather, if you will - portfolio: not despite, but because of its derivatives offering and its dominant market position....

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