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Why It's Worth Betting on Intercontinental (ICE) Stock Now
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Intercontinental Exchange, Inc.’s (ICE - Free Report) solid portfolio, expansive risk management services, strategic buyouts, solid balance sheet and effective capital deployment along with favorable growth estimates make it a good investment choice.
Growth Projections
The Zacks Consensus Estimate for Intercontinental Exchange’s 2021 and 2022 earnings per share is pegged at $5.09 and $5.54, indicating a year-over-year increase of 12.9% and 8.7%, respectively.
Estimate Revision
The Zacks Consensus Estimate for 2021 and 2022 has moved north by 1 cent each in the past 30 days, reflecting analyst optimism.
Earnings Surprise History
Intercontinental Exchange has a decent surprise history, having surpassed estimates in three of the last four reported quarters and missing in one, with the average beat being 3.11%.
Zacks Rank & Price Performance
Intercontinental Exchange currently carries a Zacks Rank #2 (Buy). Year to date, the stock has rallied 11.9% compared with the industry’s increase of 29%.
Image Source: Zacks Investment Research
Return on Equity (ROE)
The company’s ROE for the trailing 12 months is 13.6%, better than the industry average of 13.5%, reflecting the company’s efficiency in utilizing shareholders’ fund. The company aims to generate solid mid-teens returns for its shareholders.
Business Tailwinds
Intercontinental Exchange’s top line should continue to benefit from its expansive product and service portfolio. ICE estimates fourth-quarter 2021 revenues between $892 and $907 million.
Given compelling global data services, management estimates recurring revenues in the Fixed Income and Data Services segment to improve sequentially to a range of $415 million to $420 million
Exchange segment revenues are estimated between $330 million and $335 million for the fourth quarter of 2021.
Being the largest mortgage network across the United States, Intercontinental Exchange is poised to benefit from accelerated digitization in the U.S. residential mortgage industry. Thus, ICE Mortgage Technology is estimated to generate revenues in the range of $147 million to $152 million in the fourth quarter of 2021, implying 25% growth year over year.
Also, with over 5,000 indices representing more than $1 trillion in benchmark assets under management, Intercontinental boasts being the second-largest fixed income provider globally.
Intercontinental Exchange has strong liquidity and capital position and has also been effectively lowering leverage ratios. It plans to invest $25 million to $30 million in 2021 to enhance its Mortgage Technology platforms.
Dividend History
Intercontinental Exchange hiked its dividend by 10% in July 2021 and currently yields 1.2%, better than the industry average of 1%. This makes the stock an attractive pick for yield-seeking investors.
Attractive Valuation
Price to forward 12-months forward earnings is pegged at 23.46, lower than the industry average of 29.7.
OTC Markets Group sports a Zack Rank #1 (Strong Buy). The Zacks Consensus Estimate for OTC Markets Group’s 2021 and 2022 has moved up 8.3% and 14.9% in the past 30 days. The expected long-term earnings growth rate is pegged at 9%, in line with the industry average.
Cboe Global carries a Zack Rank #2. The Zacks Consensus Estimate for Cboe Global’s 2021 and 2022 has moved up 0.2% and 0.8% in the past 30 days.
Cincinnati Financial carries a Zacks Rank #2. The Zacks Consensus Estimate for Cincinnati Financial’s 2021 and 2022 has moved up 0.9% and 5% in the past 30 days.
Shares of OTCM, CBOE and CINF have gained 72.2%, 36.5% and 29.1%, respectively year to date.
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Why It's Worth Betting on Intercontinental (ICE) Stock Now
Intercontinental Exchange, Inc.’s (ICE - Free Report) solid portfolio, expansive risk management services, strategic buyouts, solid balance sheet and effective capital deployment along with favorable growth estimates make it a good investment choice.
Growth Projections
The Zacks Consensus Estimate for Intercontinental Exchange’s 2021 and 2022 earnings per share is pegged at $5.09 and $5.54, indicating a year-over-year increase of 12.9% and 8.7%, respectively.
Estimate Revision
The Zacks Consensus Estimate for 2021 and 2022 has moved north by 1 cent each in the past 30 days, reflecting analyst optimism.
Earnings Surprise History
Intercontinental Exchange has a decent surprise history, having surpassed estimates in three of the last four reported quarters and missing in one, with the average beat being 3.11%.
Zacks Rank & Price Performance
Intercontinental Exchange currently carries a Zacks Rank #2 (Buy). Year to date, the stock has rallied 11.9% compared with the industry’s increase of 29%.
Return on Equity (ROE)
The company’s ROE for the trailing 12 months is 13.6%, better than the industry average of 13.5%, reflecting the company’s efficiency in utilizing shareholders’ fund. The company aims to generate solid mid-teens returns for its shareholders.
Business Tailwinds
Intercontinental Exchange’s top line should continue to benefit from its expansive product and service portfolio. ICE estimates fourth-quarter 2021 revenues between $892 and $907 million.
Given compelling global data services, management estimates recurring revenues in the Fixed Income and Data Services segment to improve sequentially to a range of $415 million to $420 million
Exchange segment revenues are estimated between $330 million and $335 million for the fourth quarter of 2021.
Being the largest mortgage network across the United States, Intercontinental Exchange is poised to benefit from accelerated digitization in the U.S. residential mortgage industry. Thus, ICE Mortgage Technology is estimated to generate revenues in the range of $147 million to $152 million in the fourth quarter of 2021, implying 25% growth year over year.
Also, with over 5,000 indices representing more than $1 trillion in benchmark assets under management, Intercontinental boasts being the second-largest fixed income provider globally.
Intercontinental Exchange has strong liquidity and capital position and has also been effectively lowering leverage ratios. It plans to invest $25 million to $30 million in 2021 to enhance its Mortgage Technology platforms.
Dividend History
Intercontinental Exchange hiked its dividend by 10% in July 2021 and currently yields 1.2%, better than the industry average of 1%. This makes the stock an attractive pick for yield-seeking investors.
Attractive Valuation
Price to forward 12-months forward earnings is pegged at 23.46, lower than the industry average of 29.7.
Other Stocks to Consider
Some other top-ranked stocks include OTC Markets Group (OTCM - Free Report) , Cboe Global Markets (CBOE - Free Report) and Cincinnati Financial Corporation (CINF - Free Report) .
OTC Markets Group sports a Zack Rank #1 (Strong Buy). The Zacks Consensus Estimate for OTC Markets Group’s 2021 and 2022 has moved up 8.3% and 14.9% in the past 30 days. The expected long-term earnings growth rate is pegged at 9%, in line with the industry average.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Cboe Global carries a Zack Rank #2. The Zacks Consensus Estimate for Cboe Global’s 2021 and 2022 has moved up 0.2% and 0.8% in the past 30 days.
Cincinnati Financial carries a Zacks Rank #2. The Zacks Consensus Estimate for Cincinnati Financial’s 2021 and 2022 has moved up 0.9% and 5% in the past 30 days.
Shares of OTCM, CBOE and CINF have gained 72.2%, 36.5% and 29.1%, respectively year to date.