Jefferies Ups Chicago Merc Exchange to 'Buy'

Analyst Charlotte Chamberlain cites valuation, following a selloff on news of CEO JAmes McNulty's departure

Jefferies upgraded Chicago Mercantile Exchange (CME ) to buy from hold.

Analyst Charlotte Chamberlain says the upgrade is based on valuation. She says Chicago Mercantile Exchange plunged 15% since the market close on Aug. 18, the evening before the company announced the yearend departure of CEO James McNulty.

Chamberlain says the replacement CEO Craig Donohue is a seasoned, dynamic executive who is fully capable of enhancing shareholder value. She maintains her $3.63 2003 earnings per share (GAAP) estimate, and the $3.53 2004 earnings per share estimate. Chamberlain also reiterates her $75 target.

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