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CME Group Inc Class A CME

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Morningstar’s Analysis

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Economic Moat


Capital Allocation


CME Group’s Revenue Is Stabilizing

Michael Wong, CFA, CPA Sector Director

Analyst Note

| Michael Wong, CFA, CPA |

Wide-moat CME Group reported sequentially improved revenue in the fourth quarter, and we believe revenue may have stabilized after a fairly volatile year. The company reported net income to common shareholders of $424 million, or $1.18 per diluted share, on $1.1 billion of revenue during the fourth quarter. Revenue increased 1.6% from the previous quarter, but was down 3.5% year over year. CME Group is more exposed to asset classes that are cyclically depressed, including interest rates and energy. For the full year, revenue increased less than 1% to $4.88 billion, as strong activity in the first quarter was largely offset by weaker activity in the remainder of the year, and earnings per diluted share declined less than 1% to $5.87. We don’t anticipate making a material change to our $153 per share fair value estimate for CME Group.

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Company Profile

Business Description

Based in Chicago, CME Group operates exchanges that allow investors, suppliers, and businesses to trade futures and derivatives based on interest rates, equity indexes, foreign currencies, energy, metals, and agricultural commodities. The CME was founded in 1898 and in 2002 completed its initial public offering. Since then, CME Group has consolidated part of the industry by merging with crosstown rival CBOT Holdings (2007) before acquiring Nymex Holdings in 2008. In addition, CME has a 27% stake in S&P/Dow Jones Indexes LLC.

20 South Wacker Drive
Chicago, IL, 60606
T +1 312 930-1000
Sector Financial Services
Industry Financial Data & Stock Exchanges
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2021
Stock Type Cyclical
Employees 4,370