** CIBC downgrades Canada’s biggest stock exchange operator to “neutral” from “outperform”, lowers earnings estimates and cuts PT to C$97 from C$101
** Cuts Q1 operating EPS estimate by 5% on lower-than-expected listings activity, derivatives trading volumes and expiration of a software licensing agreement worth about $8 mln annually
** CIBC’s EPS estimate of $1.23 is 10% lower than Q1 last year and is modestly below consensus of $1.26
** Says both listing and trading activity on the Venture Exchange have really slowed to start the year and this puts a small dent in the near-term earnings outlook and may also temporarily crimp perception around the long-term strategy to grow the Venture listings business
** Says derivatives volumes were up 11% y-o-y, but were less than brokerage’s expectations given the benefit of extended trading hours; CIBC now expect 4% derivatives revenue growth versus 14% previously
** 5 of 6 brokerages rate the stock “buy”, 1 “hold”; median PT is C$97
** Stock has risen about 25% so far this year, compared with a 16% increase in the Toronto Stock Exchange 300 Composite Index (Reporting by Arathy S Nair)
Our Standards: The Thomson Reuters Trust Principles.