Will This Price Target Decrease Hurt CBOE Holdings (CBOE) Stock Today?

NEW YORK (TheStreet) -- CBOE Holdings (CBOE) stock has had its price target decreased to $57 from $58, UBS said Tuesday. The firm said the revision was driven by lower-than-expected volumes. A "buy" rating has been maintained. 

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Separately, TheStreet Ratings team rates CBOE HOLDINGS INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate CBOE HOLDINGS INC (CBOE) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, reasonable valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • CBOE's revenue growth has slightly outpaced the industry average of 3.6%. Since the same quarter one year prior, revenues rose by 10.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • CBOE has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.60, which clearly demonstrates the ability to cover short-term cash needs.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Diversified Financial Services industry and the overall market, CBOE HOLDINGS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for CBOE HOLDINGS INC is rather high; currently it is at 57.41%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 31.05% significantly outperformed against the industry average.
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