Goldman Sachs Downgrades CME Group (CME) to Sell on EPS Risk and Valuation

December 10, 2012 7:00 AM EST
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Price: $116.11 -0.65%

Rating Summary:
    8 Buy, 13 Hold, 3 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 35 | Down: 31 | New: 9
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Goldman Sachs downgraded CME Group (NASDAQ: CME) from Neutral to Sell with a price target of $48.00 (from $53.00) saying they see the focus shifting from dividends to weakening fundamentals.

The firm sees EPS risks and are 8% below the Street as the backdrop for CME's core products (rates, index and energy) is weak with total open interest at the lowest point in three years, down 12% yoy.

In addition, Goldman said valuation is stretched. "Since changing its dividend policy, CME’s P/E re-rated +40%, but with the fifth dividend catalyst out of the way, we see the stock de-rating lower to 2012 average P/E of 15.5X, 7% below current levels.

For an analyst ratings summary and ratings history on CME Group click here. For more ratings news on CME Group click here.

Shares of CME Group closed at $54.96 yesterday.

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