CME Group operates contract markets for the trading of futures and options on futures contracts worldwide. It offers a range of products for trading and/or clearing across various asset classes, based on interest rates, equity indexes, foreign exchange, energy, agricultural commodities, and metals. The company was founded in 1898 and is based in Chicago, Illinois.
CME Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Cme Group Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Cme Group Inc ranked in the 53th percentile in terms of potential gain offered. Specifically, our DCF analysis implies the stock is trading below its fair value by an estimated 20.83%. The most interesting components of our discounted cash flow analysis for Cme Group Inc ended up being:
The company's balance sheet shows it gets 38% of its capital from equity, and 62% of its capital from debt. Its equity weight surpasses that of merely 19.09% of free cash flow generating stocks in the Financial Services sector.
Cme Group Inc's weighted average cost of capital (WACC) is 5%; for context, that number is higher than only 1.23% of tickers in our DCF set.
CME's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than only 1.23% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
CINF, SPGI, CNA, BRK.B, and FSAM can be thought of as valuation peers to CME, in the sense that they are in the Financial Services sector and have a similar price forecast based on DCF valuation.
Since the market rout on March 12, otherwise known as ‘Black Thursday,’ bitcoin futures and options contracts have seen significant demand. On May 14, CME Group saw the total number of outstanding derivatives contracts (open interest) touch a high of $142 million. Four days later, CME broke records again. Data from the researchers at Skew.com […] The post Bitcoin Futures, Options, and Open Interest: Crypto Derivatives Break Records After the Halving appeared first on Bitcoin News .