CME Earnings: Strong Volume and Higher Pricing Drive Double-Digit Revenue and Earnings Growth

Wide-moat-rated CME Group reported strong second-quarter results as high trading volume in commodity futures more than offset a decrease in equity futures trading. Net revenue increased 10% from last year to $1.36 billion, while net income increased 17.4% to $777 million. CME’s performance in the first half of 2023 has been impressive, but we generally advise against placing too much weight on any individual quarter’s results. CME’s revenue is primarily transactional, and volume can significantly vary from quarter to quarter based on market conditions. As we incorporate these results, we do not plan to materially alter our $215 fair value estimate. We see the shares as only modestly undervalued.