CME Group (CME) is viewed as both a cyclical and defensive beneficiary amid ongoing macro, credit, and tariff concerns, while new growth initiatives such as prediction markets, tokenization, and expanded crypto trading are not yet reflected in the stock's valuation, Morgan Stanley said in a Thursday note.

The brokerage said the company has scope "to extend its futures exchange moat and pave the way for new growth vectors that are not yet in the price." It highlighted CME's strong clearing economics and more defensible transaction-based revenue streams compared with peers that operate equity exchanges.

The firm said CME is likely to benefit from uncertainty and tariff-induced inflation, as well as supply chain disruptions and the energy transition, which are prompting corporate and institutional clients to hedge more actively. Market volatility in this environment typically drives trading toward CME's deep liquidity pools, the note added.

Morgan Stanley raised its fiscal 2026 and 2027 earnings per share estimates by 0.5% and 0.6%, respectively, reflecting higher confidence in market data and lower costs.

The firm lifted its price target to $314 from $312 and reiterated an overweight rating.

Price: 269.63, Change: +1.82, Percent Change: +0.68