Intercontinental Exchange is the IBD Stock Of The Day amid accelerating earnings growth. On Friday, ICE stock wavered in buy range, holding above key support levels.
On Feb. 6, the operator of global financial exchanges, including the NYSE and many others, delivered a Q4 earnings beat. While offering a solid outlook, the company touted nine consecutive years of record revenues.
This is a testament to the company's "all-weather" business model, ICE CEO Jeffrey Sprecher said.
Defensive, dividend and Steady Eddy stocks, delivering consistent growth, are winning investors' favor. The S&P 500 headed on Friday for its worst week since September on tariff uncertainty.
Nine analysts hiked price target on ICE stock after the Q4 report, FactSet shows. One cut.
ICE Stock In Buy Range, Near Record Highs
Intercontinental Exchange shares gained 0.3% in Friday's stock market action. ICE stock retested a cup-base buy point at 167.99, after making a record high on Monday, according to MarketSurge charts. Trade has been fairly tight, despite the volatile market, with shares finding support at their 21-day exponential moving average on Friday.
The relative strength line, the blue line in the chart provided here, has returned to September 2024 highs. A rising RS line means that a stock is outperforming the S&P 500 index. However, that strength indicator has moved sideways over the past several years.
An 88 RS Rating means the financial services stock has outpaced 88% of all stocks in IBD's database over the past year. That score is up from 86 a month ago and 79 four weeks ago, MarketSurge shows.
ICE stock has a favorable 21-day ATR of 1.78%.
The average true range is a metric available on IBD's MarketSurge charting tool. It gauges the characteristic breadth of a stock's behavior. Stocks that tend to make large jumps or dives in daily action, the kind that can trigger sell rules and shake investors out of a stock, have a high ATR. Stocks that tend to make more gradual moves have lower ATRs.
In a volatile market, IBD suggests stocks with ATRs of 3 or below.
Specialty financial services stocks are holding up in a tough market. IBD chose Fiserv as Stock of the Day on Tuesday. Tradeweb Markets was Stock of the Day on Feb. 28.
The specialty financial services group currently ranks a strong No. 27 out of 197 industry groups tracked by IBD.
Intercontinental Exchange Earnings, Outlook
The IBD Stock Checkup tool shows that ICE stock holds a superior Composite Rating of 97 out of 99. IBD's Composite Rating rolls various fundamental and technical metrics into one easy-to-use score.
Intercontinental Exchange bears an EPS Rating of 82 out of a best-possible 99. Earnings growth averaged 8.9% over the past three quarters, above the three-year average of 5%. The stock also shows one quarter of earnings acceleration.
The Atlanta-based company capped a strong 2024 with solid Q4 results. Revenue in the final quarter rose 5%, year over year, to $2.323 billion. Earnings jumped 14% to $1.52 per share, quickening sharply from 5%-6% gains in each of the prior four quarters.
For the full year, Intercontinental Exchange earnings per share grew 8%. Revenue jumped 16% to a record $9.3 billion.
Financial Company Offers 'All-Weather' Earnings Growth
In an earnings release, ICE CEO Sprecher said the results testified "to the resilience of our 'all-weather' business model," which delivered compounding growth through diverse macroeconomic environments.
"Customers access our leading networks to manage risk, consume our mission-critical data, and drive greater workflow efficiencies," he added.
Analysts project 10.7% earnings growth in 2025 and a further 12.2% gain in 2026, FactSet shows.
But Morningstar analyst Michael Miller cautioned that nearly all the company's growth in the latest quarter came from transactional sources. Transaction revenue rose 10% vs. 1% for recurring revenue.
"We place more weight on recurring revenue since its future performance can be more reliably extrapolated," he said.
For 2024 as a whole, recurring and transaction revenue were more evenly matched, growing 17% and 16%, respectively.
Year to date, ICE stock has rallied around 14%, vs. an almost 2% decline for the S&P 500. Over the past year, Intercontinental Exchange shares have advanced 23% to all-time highs.
Please follow Aparna Narayanan on X @IBD_Aparna for more coverage.
