UBS increased its price target for CBOE Holdings (NYSE:CBOE) to $290.00 from $280.00 while maintaining a Neutral rating on the shares. At the time of the update CBOE was trading at $274.99, roughly 1% below its 52-week high of $275.86.
The price-target change follows the exchange operator's fourth-quarter results. Those results produced some near-term underperformance in the stock, as investors had anticipated a more immediate and visible reduction in expenses related to the company's exit from several business lines.
UBS observed that a substantial portion of the expected cost reductions - estimated at about 8-10% of total expenses - has not yet been realized. The firm framed this lag as a potential upside opportunity for CBOE going forward if the savings are implemented as planned.
At the same time, UBS revised its forward projections for CBOE upward, citing trading volumes that are tracking better than originally projected in the first quarter. While UBS flagged the question of whether this stronger performance can be sustained over time, the bank also noted that CBOE has a pattern of surprising analysts to the upside on results.
Third-party data cited alongside the update shows that five analysts have nudged their earnings estimates higher for the upcoming period. The combination of volume strength and analyst revisions underpinned UBS's decision to lift its target despite retaining a Neutral rating.
Separately, Cboe Global Markets Inc. reported fourth-quarter 2025 results that beat consensus forecasts. The company posted adjusted diluted earnings per share of $3.06, above the $2.85 analysts had expected - a 7.37% surprise relative to estimates. Revenue for the quarter came in at $671.1 million versus anticipated revenue of $636.57 million.
Even with those positive earnings and revenue figures, the stock moved lower in pre-market trading on the report; specific drivers of that intraday move were not detailed in the available information.
Summary
UBS raised its price target on CBOE to $290 from $280 and kept a Neutral rating after quarterly results and stronger-than-expected trading volumes prompted upward revisions to forward estimates. Expected expense savings tied to CBOE's business exits - estimated at roughly 8-10% of total expenses - have not fully materialized, creating a potential upside should they be realized. Cboe's reported fourth-quarter 2025 adjusted EPS of $3.06 and revenue of $671.1 million both exceeded forecasts, though the stock dipped in pre-market trading.
Key points
- UBS lifted its price target on CBOE to $290 from $280 while maintaining a Neutral rating.
- CBOE traded at $274.99, about 1% below its 52-week high of $275.86; five analysts have raised their earnings estimates for the coming period.
- Cboe reported Q4 2025 adjusted EPS of $3.06 (vs. $2.85 expected) and revenue of $671.1 million (vs. $636.57 million expected), with the stock falling in pre-market trading despite the beats.
Risks and uncertainties
- Sustainability of volume-driven results - UBS noted ongoing uncertainty about whether the recent strength in trading volumes can be maintained, which affects future revenue projections and market sentiment.
- Realization of projected cost savings - a large portion of the anticipated 8-10% expense reduction has not yet appeared, creating execution risk tied to margin improvement.
- Near-term market reaction and volatility - despite upside surprises in earnings and revenue, the stock declined in pre-market trading, indicating potential continued short-term volatility.