Section 1: Company Overview and Fundamentals

1.1 Company Overview:

CME Group Inc. (NASDAQ: CME) provides products across all asset classes, by trading futures, options, cash and over the counter (OTC) products. The Company offers a range of interest rates, equity indexes, foreign exchange (FX), agricultural commodities, energy and metals.

Kalkine’s Diversified Opportunities Report covers the Company Overview, Key positives & negatives, Investment summary, Key investment metrics, Top 10 shareholding, Business updates and insights into company recent financial results, Key Risks & Outlook, Price performance and technical summary, Target Price, and Recommendation on the stock.

Stock Performance:

• The stock has given a return of 67% in the last six months as well as by 16.36% in past nine months.
• The stock is leaning towards the higher band of its 52-week range of USD 223.80 and 52-week low price of USD 173.42, with the current price inside a decent support area of around USD 200-USD 210.
• The price is currently between both its short-term (50-day) SMA and long-term (200-day) SMA, with the current RSI of 53.93.

1.2 The Key Positives, Negatives, and Investment summary

1.3 Top 10 shareholders:

The top 10 shareholders together form ~36.21% of the total shareholding, signifying diverse shareholding. The Vanguard Group, Inc., and BlackRock Institutional Trust Company, N.A. are the biggest shareholders, holding the maximum stake in the company at ~9.19% and ~4.55%, respectively.

1.4 Key Metrics:

In the financial performance analysis of CME, presented as a percentage of industry median figures, several key metrics were evaluated over the years FY18 to FY22. The revenue for CME increased significantly during this period, growing from 4309.4 million USD in FY18 to 7217.8 million USD in FY22, demonstrating a compound annual growth rate (CAGR) of approximately 14.64%. Additionally, the Net margins for CME in Q3FY23 stood at 37.3% which is notably higher than the industry median of 17.1%. In terms of leverage, the Debt/Equity ratio for CME was lower at 0.13x in Q3FY23 vs. industry median of 0.53x.

Section 2: Business Updates and Corporate Business Highlights

2.1 Recent Updates:

The below picture gives an overview of the recent updates:

2.2 Insights of Q3FY23:

Section 3: Key Risks & Outlook

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

Stock Performance:

• The stock has given a return of 67% in the last six months as well as by 16.36% in past nine months.
• The stock is leaning towards the higher band of its 52-week range of USD 223.80 and 52-week low price of USD 173.42, with the current price inside a decent support area of around USD 200-USD 210.
• The price is currently between both its short-term (50-day) SMA and long-term (200-day) SMA, with the current RSI of 53.93.

4.2 Fundamental Valuation

Valuation Methodology: Price/Earnings Multiple Based Relative Valuation

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is January 31, 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: The report publishing date is as per the Pacific Time Zone.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

 Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

 Stop-loss: It is a level to protect against further losses in case of unfavorable movement in the stock prices.