How Much Upside Can An Increase Commodity Contract Rates Drive For CME?

There could be a greater than 10% upside to our price estimate for CME in the next few years if the rate per contract for commodity derivatives rises at a faster than expected pace, owing to the consolidation in the financial markets (such as Deutsche Boerse’s acquisition of London Stock Exchange Group). Moreover, the general economic stability and growth in the future should help boost commodity derivative revenues.

Have more questions about CME? See the links below:

• CME Group Sees Growth In All Asset Classes In February
• What’s CME’s Revenue And EBITDA Breakdown In Terms Of Operating Segments?
• How Has CME’s Revenue Composition Changed Over The Past 5 Years?
• How Has CME’s Revenue & EBITDA Changed In The Last Five Years?
• How Is CME Expected To Grow In The Next Five Years?
• What Is CME’s Fundamental Value Based On Expected 2016 Results?
• What Drove CME’s Revenue And EBITDA Growth In 2015?
• How Important Is Interest Rate Contracts’ Trading Revenue For CME?
• What Percentage Of CME’s Value Comes From Energy Contracts’ Trading Revenues?

Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment / ask questions on the comments section

2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to the full Trefis analysis for CME Group.