CBOE Loses Its Edge? Analyst Downgrades Stock On Valuation Worries, Volume Slowdown

BofA Securities analyst Craig Siegenthaler downgraded Cboe Global Markets Inc. CBOE from Buy to Neutral, lowering the price target to $227 from $260.

The analyst noted that while the broader diversified financials sector has declined 10% year-to-date amid the growing tariff dispute, CBOE Global Markets has stood out by delivering a 5% return —outperforming its peers by about 15%.

This strong performance, according to Siegenthaler, is largely attributed to CBOE’s defensive business model, which tends to benefit during periods of heightened market volatility and increased trading volumes.

However, despite the solid year-to-date gains, the analyst expressed caution going forward.

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The stock's recent outperformance has led to a “higher relative valuation” compared to peers.

Siegenthaler pointed out that CBOE’s next 12 months, or NTM price-to-earnings ratio, has increased by 2% so far this year, while the average PE multiple for the broader diversified financials sector has dropped by 13%. As a result, CBOE now appears about 15% more expensive compared to its peers on a relative valuation basis.

The analyst also pointed to potential deceleration in trading volumes during the second half of 2025, which could weigh on future performance.

Siegenthaler writes that the first half of 2025 will likely mark the cyclical peak for exchange volumes, with a significant decline expected in the second half.

The analyst projects a 6% drop in volumes from the first to the second half of the year, and only a 7% year-over-year increase in total options volume for 2H25.

The analyst is especially concerned about the retail trading segment, where participation may fall due to poor investor performance so far this year.

Siegenthaler lowered earnings estimates for the second half of 2025 and the following years.

The new projections are $4.60 for the second half of 2025, $9.89 for 2026, and $11.37 for 2027 — down from previous estimates of $5.07, $11.16, and $12.99, respectively.

CBOE Price Action: CBOE shares closed Thursday up 2.05% to $210.02.

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