CME Group Earnings: Volume Growth Offsets Lower Average Pricing to Drive Double-Digit Revenue Growth

Wide-moat-rated CME group reported strong third-quarter earnings that were in line with our expectations as the company benefits from strong trading volume in multiple major asset classes. Net revenue increased 18% from last year and 3.4% from last quarter to $1.58 billion. Meanwhile, diluted earnings per share increased to $2.50 from $2.06 last year. While these were strong results, they were not surprising as the firm’s monthly trading volume reports had built up expectations heading into the earnings release. As we incorporate these results, we do not expect to materially alter our $225 fair value estimate for CME. We see the shares as fairly valued at the current price.