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Atlanta, Georgia-based Intercontinental Exchange, Inc. (ICE) provides market infrastructure, data services, and technology solutions for financial institutions, corporations, and government entities. Valued at $85.95 billion by market cap, the company operates electronic energy markets and soft commodity exchanges and offers access to contracts based on crude oil and refined products, natural gas, power, and emissions, as well as agricultural commodities, including cocoa, coffee, cotton, orange juice, and sugar.
Shares of this leading operator of global exchanges and data services provider have outperformed the broader market considerably over the past year. ICE has gained 30% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 15.6%. In 2024, ICE stock is up 15.4%, surpassing the SPX’s 8.5% rise on a YTD basis.
Zooming in further, ICE has outperformed the S&P 500 Financials Sector SPDR (XLF). The exchange-traded fund has gained about 16.9% over the past year. Moreover, ICE’s double-digit returns on a YTD basis outshine the ETF’s 8.5% returns over the same time frame.
ICE’s overall performance can be attributed to its strategic decisions, including the acquisition of Black Knight and maintaining a diversified product lineup, which has strengthened its financial resilience amidst heightened volatility in global commodity and energy markets.
With diversified revenue streams across multiple segments and a focus on wisely managing capital, the company has maintained a competitive edge while navigating the changing landscape of supply chains during conflicts in the Middle East, leading to increased trading activity.
On Aug. 1, ICE shares closed down marginally after it reported its Q2 results. Its adjusted EPS of $1.52 surpassed the analyst estimates of $1.49. The company’s revenue increased 24% year over year to $2.90 billion. The overall revenue from ICE's exchange business, its largest income source, increased 14% year over year to $1.25 billion. For Q3, ICE's adjusted operating expenses are expected to be between $955 million and $965 million. Its adjusted non-operating expense is expected to be between $190 million and $195 million.
Moreover, ICE's diluted share count is expected to be between 573 million and 579 million weighted average shares outstanding, and its full-year adjusted operating expenses are expected to be between $3.79 billion and $3.82 billion.
For the current fiscal year, ending in December, analysts expect ICE’s EPS to grow 6.9% to $6.01 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 15 analysts covering ICE stock, the consensus rating is a “Strong Buy.” That’s based on 11 “Strong Buy” ratings, one “Moderate Buy,” and three “Holds.”
This configuration is slightly more bullish than three months ago, with 10 suggesting a “Strong Buy.”
Recently, Goldman Sachs analyst Alexander Blostein reiterated a “Buy” rating on ICE stock, with a $173 price target, implying a potential upside of 15.4% from current levels.
The mean price target of $158.69 represents a 5.9% premium to ICE’s current price levels. The Street-high price target of $167 suggests an upside potential of 11.4%.
On the date of publication, Neha Panjwani 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.
