Bank of America Securities downgraded CBOE Holdings (NYSE:CBOE) from Buy to Neutral, trimming its price target to $227 from $260, as the firm anticipates a potential slowdown in trading activity during the second half of 2025 and beyond.
While CBOE still maintains strong competitive advantages in index options—such as tax efficiency, extended trading hours, and cash settlement—analysts at BofA caution that the favorable conditions that boosted volumes in the first half of the year may begin to fade. A particular concern is declining retail investor engagement, which has been a key driver of recent trading surges.
As a result, the firm has cut its volume expectations and adjusted its earnings estimates downward. Forecasted earnings for the second half of 2025 now stand at $4.60, with full-year estimates for 2026 and 2027 revised to $9.89 and $11.37, respectively, from previous forecasts of $11.16 and $12.99.
Despite maintaining long-term confidence in CBOE’s market positioning, BofA believes the growth outlook is becoming less certain, justifying a more cautious stance.