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Intercontinental Exchange, Inc. (ICE), headquartered in Atlanta, Georgia, delivers market infrastructure, data services, and technology solutions to financial institutions, corporations, and government agencies. Valued at a market cap of $89.8 billion, the company operates electronic energy markets and soft commodity exchanges, providing access to contracts covering crude oil, refined products, natural gas, power, emissions, and agricultural commodities such as cocoa, coffee, cotton, orange juice, and sugar.
Shares of this leading operator of global exchanges and data services provider have outperformed the broader market considerably over the past year. ICE has gained 43.1% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 35.9%. However, in 2024, ICE stock is up 22.3%, trailing the SPX’s 25.8% rise on a YTD basis.
Zooming in further, ICE has underperformed the iShares U.S. Broker-Dealers & Securities Exchanges ETF (IAI). The exchange-traded fund has gained about 61.4% over the past year. Moreover, ICE’s double-digit returns on a YTD basis lags behind the ETF’s 38.7% returns over the same time frame.
On Oct. 31, ICE reported its Q3 earnings, and its shares dipped 6.4%. It reported record net revenues of $2.3 billion, a 17% increase year-over-year, though it slightly missed the estimate by 0.1%. Adjusted operating expenses increased 18.2% to $960 million, in line with estimates. Adjusted operating income reached a record $1.4 billion, also up 17% year-over-year, with an adjusted operating margin remaining flat at 59%, outperforming the 50% estimate.
For the current fiscal year, ending in December, analysts expect ICE’s EPS to grow 8% to $6.07 on a diluted basis. The company’s earnings surprise history is impressive. It beat or matched the consensus estimate in each of the last four quarters.
Among the 17 analysts covering ICE stock, the consensus rating is a “Strong Buy.” That’s based on 11 “Strong Buy” ratings, three “Moderate Buy,” and three “Holds.”
This configuration is slightly less bullish than three months ago, with 12 analysts suggesting a “Strong Buy.”
On November 11, Deutsche Bank Aktiengesellschaft (DB) raised its price target for Intercontinental Exchange to $163 from $160, maintaining a “Hold” rating. Following the U.S. elections, the firm updated its macro assumptions for brokers, asset managers, and exchanges. Deutsche believes the macro environment, through at least 2025, could stimulate capital market activity, supported by fiscal stimulus and potentially lighter regulation.
The mean price target of $180.88 represents a 15.2% premium to ICE’s current price levels. The Street-high price target of $200 suggests an upside potential of 27.3%.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
