5 Securities & Exchanges Stocks to Watch Amid Increased Volatility

Core Insights - The Zacks Securities and Exchanges industry is benefiting from a diversified product portfolio, increased trading volumes, and the adoption of crypto assets, which is expected to drive revenues for key players like S&P Global, Intercontinental Exchange, CME Group, Nasdaq, and Cboe Global Markets [1][4][5] - The industry is experiencing a shift towards non-trading revenue sources, including market technology and data services, which enhances business dynamism and stability [1][6] - Mergers and acquisitions are becoming more prevalent as companies seek to innovate and adapt to changing market conditions [3][7] Industry Overview - The Zacks Securities and Exchanges industry includes companies that operate electronic marketplaces for trading various financial instruments, generating revenue from fees and data services [4] - The industry is witnessing a growing adoption of crypto assets, although regulatory compliance remains a challenge [4] Trends Impacting the Industry - Volatility in financial markets is driving trading volumes, which in turn boosts transaction and clearing fees, a primary revenue driver [5] - Companies are diversifying into recurring revenue sources to reduce reliance on trading income, focusing on data services and technology platforms [6] - Continuous investment in technology, including AI and blockchain, is enhancing operational efficiency and competitiveness [8] Performance Metrics - The Zacks Securities and Exchanges industry has underperformed compared to the broader Zacks Finance sector and the S&P 500, with a year-to-date gain of 0.6% versus 13% and 17% respectively [13] - The industry is currently trading at a trailing P/E ratio of 23.31, higher than the S&P 500's 22.6 and the sector's 17.5 [16] Earnings Outlook - The Zacks Industry Rank for the Securities and Exchanges industry is 48, placing it in the top 20% of 243 Zacks industries, indicating positive near-term prospects [9][10] - Aggregate earnings estimates for the industry have increased by 8.8% over the past year, reflecting growing analyst confidence [11] Notable Companies - Cboe Global Markets: Expected to grow with a 6.1% increase in 2026 EPS and a long-term growth rate of 16.5% [20][21] - S&P Global: Anticipated 11.4% increase in 2026 EPS, supported by ongoing service launches [24][26] - Nasdaq: Projected 8.9% and 12.3% increases in 2026 and 2027 EPS respectively, with a focus on non-trading revenue [28][29] - CME Group: Expected to see 4.5% and 5.3% increases in 2026 and 2027 EPS, driven by product expansion [31][33] - Intercontinental Exchange: Forecasted 9.3% increase in 2026 EPS, benefiting from digitization in the mortgage industry [35][36]