CME
CME Group Inc.
$249.24
Platform & Compounding FCF
70%
Two-stage FCF DCF
Mild
·
Conviction
Fair Value
Trading 4.4% below fair value
You pay
$249.24
Bear
$196.01
Fair
$260.68
Bull
$323.70
Bear
$196.01
-21.4%
6% stage 1 growth, 11% discount
Fair
$260.68
+4.6%
10% stage 1 growth, 11% discount
Bull
$323.70
+29.9%
13% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (10% base case)
Terminal Value % of EV
39%
Implied Market Multiple
21.7x
Market is pricing in (growth)
10.1%
vs 9.7% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $303.33 from 37 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $260.68 per share.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions