On Thursday, JPMorgan revised its price target for CBOE Holdings (NYSE: CBOE) shares, increasing it to $166 from $163, while maintaining an Underweight rating on the stock.
The adjustment follows the release of CBOE’s first-quarter 2024 earnings and the latest trading statistics, which were made public after the market closed on Wednesday.
CBOE’s average daily volume (ADV) for May showed a month-over-month decline in many of its key products. However, the second quarter to date presents a more varied picture.
The company’s multi-listed options volumes for the second quarter to date have seen a decrease of 6% quarter-over-quarter and 5% year-over-year.
In contrast, CBOE’s index options ADV for the same period remains relatively stable compared to the first quarter of 2024 and has recorded a 10% increase year-over-year based on May’s data.
The company’s management has recently narrowed its full-year 2024 adjusted operating expenses guidance to between $795 million and $805 million, following a significant expense beat in the first quarter.
Additionally, in April, CBOE announced plans to consolidate and phase out its digital asset business, an extension of ErisX which it acquired in May 2022. Management anticipates cost savings in the future after absorbing near-term impairment charges.
The updated price target reflects JPMorgan’s expectation of improved cost control by CBOE, which somewhat mitigates the impact of limited near-term revenue opportunities in options trading. Despite the positive adjustment to the price target, JPMorgan’s stance on CBOE Holdings remains unchanged.
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