BofA Securities analyst Craig Siegenthaler downgraded Cboe International Markets Inc. CBOE from Purchase to Impartial, decreasing the worth goal to $227 from $260.
The analyst famous that whereas the broader diversified financials sector has declined 10% year-to-date amid the rising tariff dispute, CBOE International Markets has stood out by delivering a 5% return —outperforming its friends by about 15%.
This robust efficiency, based on Siegenthaler, is essentially attributed to CBOE’s defensive enterprise mannequin, which tends to learn in periods of heightened market volatility and elevated buying and selling volumes.
Nonetheless, regardless of the strong year-to-date positive aspects, the analyst expressed warning going ahead.
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The inventory’s current outperformance has led to a “greater relative valuation” in comparison with friends.
Siegenthaler identified that CBOE’s subsequent 12 months, or NTM price-to-earnings ratio, has elevated by 2% up to now this 12 months, whereas the common PE a number of for the broader diversified financials sector has dropped by 13%. Because of this, CBOE now seems about 15% dearer in comparison with its friends on a relative valuation foundation.
The analyst additionally pointed to potential deceleration in buying and selling volumes in the course of the second half of 2025, which might weigh on future efficiency.
Siegenthaler writes that the primary half of 2025 will probably mark the cyclical peak for trade volumes, with a major decline anticipated within the second half.
The analyst tasks a 6% drop in volumes from the primary to the second half of the 12 months, and solely a 7% year-over-year improve in whole choices quantity for 2H25.
The analyst is very involved in regards to the retail buying and selling phase, the place participation could fall attributable to poor investor efficiency up to now this 12 months.
Siegenthaler lowered earnings estimates for the second half of 2025 and the next years.
The brand new projections are $4.60 for the second half of 2025, $9.89 for 2026, and $11.37 for 2027 — down from earlier estimates of $5.07, $11.16, and $12.99, respectively.
CBOE Value Motion: CBOE shares closed Thursday up 2.05% to $210.02.
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