Cboe Global Markets is poised for growth after extending its exclusive rights to list and trade options on the S&P 500 Index through 2051. Morgan Stanley upgraded the stock from underweight to overweight and raised its price target from $258 to $358, suggesting a potential upside of nearly 22% from its recent closing price.
Analyst Michael Cyprys noted that the extension of the S&P DJI contract addresses previous concerns and that the growth in options trading has been more resilient than anticipated. Additionally, Morgan Stanley increased its earnings per share estimates for Cboe for the next two years to 16% and 18%, citing stronger trading volumes and improved cost management.
The firm also sees potential value in new prediction markets tied to company performance metrics, which are not yet reflected in current estimates. Despite this positive outlook, the broader consensus among analysts remains cautious, with only 7 out of 19 recommending a buy on the stock.
Cboe's shares have appreciated 17% year to date, indicating a favorable market response to its strategic developments