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ICE Hits 52-Week High, Trades at a Discount: How to Play the Stock

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Key Takeaways

  • ICE remains well-positioned to capitalize on accelerated digitization in the mortgage industry.
  • Strategic acquisitions have delivered expense synergies and portfolio expansion, enhancing service offerings.
  • Despite rising operating expenses, ICE maintains a low-risk balance sheet supporting long-term stability.

Intercontinental Exchange Inc. (ICE - Free Report) hit a 52-week high of $181.65 on June 25. Shares closed at $180.53 after gaining 21.2% year to date, outperforming the industry, the sector and the Zacks S&P 500 composite in the same time frame.

Intercontinental has outperformed its peers, including Cboe Global Markets, Inc. (CBOE - Free Report) , CME Group Inc. (CME - Free Report) and Nasdaq, Inc. (NDAQ - Free Report) . Shares of CBOE, CME and NDAQ have gained 17.9%, 17.6% and 13.9%, respectively, year to date.

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With a market capitalization of $103.55 billion, the average number of shares traded in the last three months was 3.2 million.

ICE Trading Above 50-Day and 200-Day Moving Averages

Shares of Intercontinental are trading above the 50-day and 200-day simple moving averages (SMA) of $173.34 and $164.01, respectively, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data.

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Image Source: Zacks Investment Research

ICE Shares are Affordable

Intercontinental shares are trading at a forward price-to-earnings of 24.72X, lower than the industry average of 26.25X. Its pricing, at a discount to the industry average, gives a better entry point to investors.

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Image Source: Zacks Investment Research

ICE’s Growth Projection Encourages

The Zacks Consensus Estimate for Intercontinental Exchange’s 2025 earnings per share indicates a year-over-year increase of 14.5%. The consensus estimate for revenues is pegged at $9.96 billion, implying a year-over-year improvement of 7.3%. 

The consensus estimate for 2026 earnings per share and revenues indicates an increase of 10.4% and 5.7%, respectively, from the corresponding 2025 estimates. 
The expected long-term earnings growth rate is 13.3%, outperforming the industry average of 10.1%.

Optimistic Analyst Sentiment on ICE

Seven of the nine analysts covering the stock have raised estimates for 2025, while seven of the 10 analysts have raised the same for 2026 over the past 60 days. Thus, the Zacks Consensus Estimate for 2025 and 2026 moved 1.3% and 1.2% north, respectively, in the last 60 days.

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Image Source: Zacks Investment Research

Average Target Price for ICE Suggests Upside

Based on short-term price targets offered by 17 analysts, the Zacks average price target is $194.18 per share. The average suggests a potential 7.3% upside from the last closing price.

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Image Source: Zacks Investment Research

Earnings Surprise History

Intercontinental surpassed earnings estimates in three of the last four quarters and matched in one, the average being 1.30%.

Key Drivers of ICE Stock

ICE’s top line is poised to improve on strength in global data services and index business, growth in pricing and reference data business, and strength in ICE Global Network offering, solid desktop, feeds and derivatives analytics. The company has been achieving expense synergies from strategic acquisitions, which have also strengthened its portfolio and expanded its presence.

ICE boasts the largest mortgage network across the United States and thus remains well-positioned to benefit from accelerated digitization in the residential mortgage industry.

ICE continuously engages in strategic investments supported by a healthy and minimal risk-based balance sheet, which also offers stability and buoyancy over the medium to long term.

However, operating expenses have been increasing over the last several years, weighing on margin expansion. With continuous growth initiatives like product launches and technology upgrades, we believe that expenses are likely to remain elevated in the near term.

Though the debt balance declined, its leverage as well as times interest earned compares unfavorably with the industry average.

Wrapping Up: Keep On Holding

ICE is poised for growth, banking on the strength of its compelling portfolio and expansive risk-management services, which also ensure revenue flow, as well as strategic buyouts, a solid balance sheet and effective capital deployment. Its dividend history is impressive. It has more than doubled its dividends in the last six years.

Optimistic analyst sentiment, favorable growth estimates, as well as attractive valuations, should continue to benefit ICE over the long term.
It is, therefore, wise to hold on to this Zacks Rank #3 (Hold) stock at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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