Will Cramer Stay So Bullish on NYSE After Earnings?

NYSE Group (NYX-NYSE) has shown what might be interpreted as a dud of an earnings report.  The operating results were $0.45 EPS versus $0.46 consensus estimates; the highest estimate is $0.49.  Revenues were $658.5 million.  The comparable numbers on a year-over-year basis are a bit difficult because of the Archipelago Exchange closing in March 2006.  After backing out items for ongoing ARCA costs and for Euronext charges totalling $34.1 million, net EPS came in at $0.29.

The operating results are the ones to use, but all in all this just seems lackluster if you consider the performance and the multiples.  The stock will at least no longer trade with a 100+ P/E ratio, but the forward multiple for 2007 is still roughly 45 times earnings.  We’ll have to see how the street research reports come in, although it is worth noting that they have been in the shadows of the stock on its 100%+ performance.  The analyst calls probably won’t be out in force until Monday morning.

As a reminder, this was Cramer’s #1 Growth Stock pick for 2007 and he has been touting the stock on most occasions over the last 60+ days. So far NYX shares are down 3% at just under $99.00 pre-market; and the 52-week trading range is $48.62 to $112.00.  Its short interest was listed at 4.496 million shares as of January, up almost 3% from December.  The Chicago Mercantile Exchange (CME-NYSE) also reported some fairly lackluster results this week, but the BOT earnings were a bit better and they are in a merger together so the shares are back up essentially right where CME shares were ahead of the earnings report.

Jon C. Ogg
February 2, 2007