Goldman Sachs Adds CME Group (CME) To Conviction Buy List

Goldman Sachs Group analysts Richard Ramsden, Brian Foran, Daniel Harris and Jessica Binder Graham added CME Group Inc CME to the Conviction Buy List, with a price target of $380 per share. The analysts said that one of the primary reasons to buy CME Group Inc shares was that regulatory reform will benefit the company's core business and that new capital rules could lower costs for exchange-traded product compared to off-exchange. The Goldman Sachs Group analysts wrote, "while recent volume trends lead us to materially increase our 2Q10 EPS estimate (to $4.42 from $3.92), we also add CME to the CLBuy list to take advantage of its position as one of the leading clearing houses globally with trading exposure to interest rates, foreign exchange, and equities; the firm is positioned to offer transparency and clearing value to regulators and clients. Our $380, 12-month price target assumes that CME will trade at 21X our 2011 estimate of $18.50, and a PEG of 1.2X (17% EPS estimated growth)."