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Should You Avoid Intercontinental Exchange (ICE) Stock Now?
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Shares of Intercontinental Exchange Inc. (ICE - Free Report) unperformed the Zacks categorized Securities Exchange industry year to date. While Intercontinental Exchange shares gained 5.18%, the industry registered an increase of 5.96%. The Zacks Rank #4 (Sell) company also witnessed estimates moving down over the last 60 days. The Zacks Consensus Estimate decreased 1.3% to $3.01 for 2017 and 0.2% to $4.90 for 2018.
Given the several acquisitions undertaken, ICE has witnessed a significant rise in expenses. Management estimates adjusted operating expenses between $1.94 billion and $1.98 billion in 2017, which indicates an increase at the midpoint on a year-over-year basis. For first-quarter 2017, adjusted operating expenses are estimated in the range of $495–$505 million. We believe that the expenses are likely to remain high in the near term owing to the company’s strategic initiatives like product launches and technology upgrades. Also, higher debt and integration expenses, capital and infrastructural costs, rebates and compensation and benefits expenses are likely to keep the expense level high for the company.
ICE develops and offers an array of products, including a broad range of risk management services comprising trade execution, market data, pre- and post-trade processing and clearing services on an integrated platform. However, other players in the exchange too are rapidly evolving through new, innovative product and service launches in order to gain market share and stay ahead in the competition. As a result, ICE may be compelled to resort to price reduction and margin contraction to remain competitive and retain market share. Capital expenditures for 2017 are projected between $280 million and $300 million. Capitalized development is likely to be between $40 million and $45 million for real estate capital expenditures.
Though the company’s price to book ratio of 2.24 is lower than the industry average for a one-year period, its shares are trading higher than the median of 2.13.
American Financial Group engages primarily in property and casualty (P&C) insurance with focus on specialized commercial products for businesses. Shares of the company gained 34.09% in a year’s time.
Selective Insurance provides insurance products and services in the U.S. Its shares rallied 27.06% in a year’s time.
Progressive offers personal and commercial P&C insurance, and other specialty P&C insurance and related services, primarily in the U.S. Shares of the company gained 11.66% in a year’s time.
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Should You Avoid Intercontinental Exchange (ICE) Stock Now?
Shares of Intercontinental Exchange Inc. (ICE - Free Report) unperformed the Zacks categorized Securities Exchange industry year to date. While Intercontinental Exchange shares gained 5.18%, the industry registered an increase of 5.96%. The Zacks Rank #4 (Sell) company also witnessed estimates moving down over the last 60 days. The Zacks Consensus Estimate decreased 1.3% to $3.01 for 2017 and 0.2% to $4.90 for 2018.
Given the several acquisitions undertaken, ICE has witnessed a significant rise in expenses. Management estimates adjusted operating expenses between $1.94 billion and $1.98 billion in 2017, which indicates an increase at the midpoint on a year-over-year basis. For first-quarter 2017, adjusted operating expenses are estimated in the range of $495–$505 million. We believe that the expenses are likely to remain high in the near term owing to the company’s strategic initiatives like product launches and technology upgrades. Also, higher debt and integration expenses, capital and infrastructural costs, rebates and compensation and benefits expenses are likely to keep the expense level high for the company.
ICE develops and offers an array of products, including a broad range of risk management services comprising trade execution, market data, pre- and post-trade processing and clearing services on an integrated platform. However, other players in the exchange too are rapidly evolving through new, innovative product and service launches in order to gain market share and stay ahead in the competition. As a result, ICE may be compelled to resort to price reduction and margin contraction to remain competitive and retain market share. Capital expenditures for 2017 are projected between $280 million and $300 million. Capitalized development is likely to be between $40 million and $45 million for real estate capital expenditures.
Though the company’s price to book ratio of 2.24 is lower than the industry average for a one-year period, its shares are trading higher than the median of 2.13.
Stocks to Consider
Some better-ranked stocks from the finance sector are American Financial Group, Inc. (AFG - Free Report) , Selective Insurance Group, Inc. (SIGI - Free Report) and The Progressive Corporation (PGR). Each of these stocks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
American Financial Group engages primarily in property and casualty (P&C) insurance with focus on specialized commercial products for businesses. Shares of the company gained 34.09% in a year’s time.
Selective Insurance provides insurance products and services in the U.S. Its shares rallied 27.06% in a year’s time.
Progressive offers personal and commercial P&C insurance, and other specialty P&C insurance and related services, primarily in the U.S. Shares of the company gained 11.66% in a year’s time.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>