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Intercontinental (ICE) Up 14% in 6 Months: More Upside Left?
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Shares of Intercontinental Exchange, Inc. (ICE - Free Report) have gained 13.7% in the last six months, against the industry’s decrease of 5.7% and the Finance sector’s decrease of 0.6%. The S&P 500 composite index has lost 5.1% in the said time frame. With a market capitalization of $75.8 billion, the average volume of shares traded in the last three months was 1.8 million.
A compelling portfolio, expansive risk management services, strategic buyouts, solid balance sheet and effective capital deployment continue to drive ICE.
Intercontinental Exchange has a decent surprise history, beating earnings estimates in three of the last four reported quarters and matching the same once, with the average being 2.57%.
Image Source: Zacks Investment Research
Can ICE Stock Retain the Momentum?
ICE’s bottom line has witnessed a 16-year CAGR of 17%. The Zacks Consensus Estimate for 2022 earnings is pegged at $5.63, indicating a year-over-year improvement of 9.3% on 4.2% higher revenues of $7.4 billion. The consensus estimate for 2023 earnings is pegged at $6.09, which indicates a year-over-year improvement of 8.1% on 4.7% higher revenues of $7.8 billion. The expected long-term earnings growth rate is pegged at 8.9%.
The consensus estimate for 2022 and 2023 has moved up by a cent each in the past 30 days, reflecting analysts’ optimism.
The top line of this Zacks Rank #3 (Hold) operator of five cash equity exchanges and two equity options exchanges should continue to benefit from its expansive product and service portfolio. Strength in global data services should add to the upside. ICE estimates 5% to 6% growth in Fixed Income and Data Services recurring revenues and consolidated recurring revenues between $3.68 and $3.75 billion in 2022.
ICE boasts the largest mortgage network across the United States and remains well-poised for growth on the back of accelerated digitization taking place in the U.S. residential mortgage industry. Intercontinental estimates Mortgage revenues to grow at an average annual growth rate of 8-10% over the next 10 years.
Intercontinental’s impressive history of acquisitions has not only fueled its growth but also led it to achieve expense synergies. The buyout of mortgage-software firm Ellie Mae in 2020 not only aids the acquirer to execute well in a $10 billion addressable market but is also expected to help it realize run-rate cost synergies of $50 million to $65 million by the end of the third year.
With over 5,000 indices representing more than $1 trillion in benchmark assets under management, ICE boasts being the second-largest fixed income provider globally.
A healthy and minimal risk-based balance sheet is likely to continue providing stability and buoyancy over the medium to long term while supporting strategic investments.
Effective Capital Deployment
By virtue of a strong balance sheet with solid cash and capital position, ICE approved a 15% hike in its quarterly dividend in February 2022 and estimated $475 million worth of share repurchases in the first quarter of 2022.
Stocks to Consider
Some better-ranked stocks from the finance sector are United Fire Group, Inc. (UFCS - Free Report) , Kinsale Capital Group, Inc. (KNSL - Free Report) and Cincinnati Financial Corporation (CINF - Free Report) . United Fire currently sports a Zacks Rank #1 (Strong Buy), whereas Kinsale Capital and Cincinnati Financial carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
United Fire’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 275.45%. In the past year, the UFCS stock has declined 14.5%.
The Zacks Consensus Estimate for UFCS’ 2022 and 2023 earnings has moved 122.2% and 76.9% north, respectively, in the past 60 days.
Kinsale Capital’s earnings surpassed estimates in each of the last four quarters, the average beat being 32.04%. In the past year, Kinsale Capital has rallied 38.9%.
The Zacks Consensus Estimate for KNSL’s 2022 and 2023 earnings has moved 3.8% and 3.5% north, respectively, in the past seven days.
The bottom line of Cincinnati Financial surpassed earnings estimates in each of the last four quarters, the average being 38.48%. In the past year, the insurer has rallied 24.2%.
The Zacks Consensus Estimate for Cincinnati Financial’s 2022 and 2023 earnings has moved 5.7% and 5.5% north, respectively, in the past 60 days.
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Intercontinental (ICE) Up 14% in 6 Months: More Upside Left?
Shares of Intercontinental Exchange, Inc. (ICE - Free Report) have gained 13.7% in the last six months, against the industry’s decrease of 5.7% and the Finance sector’s decrease of 0.6%. The S&P 500 composite index has lost 5.1% in the said time frame. With a market capitalization of $75.8 billion, the average volume of shares traded in the last three months was 1.8 million.
A compelling portfolio, expansive risk management services, strategic buyouts, solid balance sheet and effective capital deployment continue to drive ICE.
Intercontinental Exchange has a decent surprise history, beating earnings estimates in three of the last four reported quarters and matching the same once, with the average being 2.57%.
Image Source: Zacks Investment Research
Can ICE Stock Retain the Momentum?
ICE’s bottom line has witnessed a 16-year CAGR of 17%. The Zacks Consensus Estimate for 2022 earnings is pegged at $5.63, indicating a year-over-year improvement of 9.3% on 4.2% higher revenues of $7.4 billion. The consensus estimate for 2023 earnings is pegged at $6.09, which indicates a year-over-year improvement of 8.1% on 4.7% higher revenues of $7.8 billion. The expected long-term earnings growth rate is pegged at 8.9%.
The consensus estimate for 2022 and 2023 has moved up by a cent each in the past 30 days, reflecting analysts’ optimism.
The top line of this Zacks Rank #3 (Hold) operator of five cash equity exchanges and two equity options exchanges should continue to benefit from its expansive product and service portfolio. Strength in global data services should add to the upside. ICE estimates 5% to 6% growth in Fixed Income and Data Services recurring revenues and consolidated recurring revenues between $3.68 and $3.75 billion in 2022.
ICE boasts the largest mortgage network across the United States and remains well-poised for growth on the back of accelerated digitization taking place in the U.S. residential mortgage industry. Intercontinental estimates Mortgage revenues to grow at an average annual growth rate of 8-10% over the next 10 years.
Intercontinental’s impressive history of acquisitions has not only fueled its growth but also led it to achieve expense synergies. The buyout of mortgage-software firm Ellie Mae in 2020 not only aids the acquirer to execute well in a $10 billion addressable market but is also expected to help it realize run-rate cost synergies of $50 million to $65 million by the end of the third year.
With over 5,000 indices representing more than $1 trillion in benchmark assets under management, ICE boasts being the second-largest fixed income provider globally.
A healthy and minimal risk-based balance sheet is likely to continue providing stability and buoyancy over the medium to long term while supporting strategic investments.
Effective Capital Deployment
By virtue of a strong balance sheet with solid cash and capital position, ICE approved a 15% hike in its quarterly dividend in February 2022 and estimated $475 million worth of share repurchases in the first quarter of 2022.
Stocks to Consider
Some better-ranked stocks from the finance sector are United Fire Group, Inc. (UFCS - Free Report) , Kinsale Capital Group, Inc. (KNSL - Free Report) and Cincinnati Financial Corporation (CINF - Free Report) . United Fire currently sports a Zacks Rank #1 (Strong Buy), whereas Kinsale Capital and Cincinnati Financial carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
United Fire’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 275.45%. In the past year, the UFCS stock has declined 14.5%.
The Zacks Consensus Estimate for UFCS’ 2022 and 2023 earnings has moved 122.2% and 76.9% north, respectively, in the past 60 days.
Kinsale Capital’s earnings surpassed estimates in each of the last four quarters, the average beat being 32.04%. In the past year, Kinsale Capital has rallied 38.9%.
The Zacks Consensus Estimate for KNSL’s 2022 and 2023 earnings has moved 3.8% and 3.5% north, respectively, in the past seven days.
The bottom line of Cincinnati Financial surpassed earnings estimates in each of the last four quarters, the average being 38.48%. In the past year, the insurer has rallied 24.2%.
The Zacks Consensus Estimate for Cincinnati Financial’s 2022 and 2023 earnings has moved 5.7% and 5.5% north, respectively, in the past 60 days.