Scott Olson

Goldman Sachs analyst Alexander Blostein upgraded Cboe Global Markets (BATS:CBOE) to Neutral from Sell on expectation that the company’s SPX options will drive significant growth, benefiting both fee capture and margins.

He also points to CBOE’s (CBOE) market share gains in Euro equities and accelerating growth in its FX business, “which collectively offset risks of moderating volumes in multi-listed options and muted trends in its VIX franchise.”

“Coupled with solid growth in Data/Access fees, we think CBOE is well positioned to drive revenue growth into 2023 — a source of differentiation among exchanges where we expect top-line in 2023 to be challenged amid tougher comps,” Blostein said.

As a result, the analyst increased his EPS estimate to $6.54 from $6.40 for 2022, to $6.79 from $6.64 for 2023, and to $7.28 from $7.08 for 2024.

Cboe (CBOE) shares have risen 0.7% in Friday morning trading.

Blostein’s Neutral aligns with the Quant rating of Hold and is still not as bullish as the average Wall Street rating of Buy.

SA contributor Andrew Cournoyer, also with a Neutral rating on CBOE (CBOE), describes the exchange as an industry fixture that has produced slow growth and is very low risk.


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