CBOE (CBOE) Upgraded to Buy: What Does It Mean for the Stock?

Core Viewpoint - CBOE Global (CBOE) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][2]. Earnings Estimates and Stock Price Movement - Changes in a company's future earnings potential, as reflected in earnings estimate revisions, are strongly correlated with near-term stock price movements [3]. - Institutional investors utilize earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [3]. CBOE's Earnings Outlook - For the fiscal year ending December 2025, CBOE is expected to earn $9.81 per share, unchanged from the previous year, but the Zacks Consensus Estimate has increased by 2.5% over the past three months [7]. Zacks Rating System - The Zacks Rank stock-rating system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have generated an average annual return of +25% since 1988 [6]. - The Zacks rating system maintains a balanced distribution of "buy" and "sell" ratings across over 4,000 stocks, ensuring that only the top 20% receive a "Strong Buy" or "Buy" rating [8][9]. Implications of the Upgrade - The upgrade of CBOE to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for higher stock movement in the near term due to favorable earnings estimate revisions [9].