Intercontinental Exchange Inc.’s (ICE - Free Report) broad range of risk management services, strategic acquisitions and a strong capital position will continue to drive the stock. This Zacks Rank #3 (Hold) securities exchange is high on potential, driven by growth drivers.
Growth Projections: The Zacks Consensus Estimate for earnings per share is $3.95 on revenues of $4.64 billion for 2017. While the top line reflects a year-over-year increase 6.18%, the bottom line surged 40.29%. For 2018, the Zacks Consensus Estimate for earnings per share is pegged at $3.34 on $4.90 billion revenues. While earnings represent a 5.58% gain, revenues reflect a 13.1% climb.
Intercontinental Exchange has long-term expected earnings per share growth of 11.0%.
An Outperformer: Intercontinental Exchange’s shares have rallied 16.11% year to date, outperforming the industry’s gain of 14.99%. It outperformed the S&P 500, improving 9.33% over the same period.
Positive Earnings Surprise History: Intercontinental Exchange has outshined the Zacks Consensus Estimate in two of the last four quarters with an average beat of 0.99%.
Growth Drivers in Place
Intercontinental Exchange boasts a compelling product and service suit along with strategic acquisitions, aiding the company to inflate revenues. The company estimates Data revenues — a leading contributor to top-line improvement — to increase 6% year over year in 2017 (with fourth-quarter Data revenues expected to be better than the third). Average daily volumes continue to show strength.
The company’s impressive inorganic growth rides on strategic buyouts. Several strategic acquisitions have not only expanded growth for Intercontinental Exchange but also resulted in achieving expense synergies.
Intercontinental Exchange deploys capital wisely. The company remains on track to pay back $1.4 billion in 2017. It has about $481 million remaining under share repurchase program as of Jun 30, 2017.
Stocks to Consider
Some better-ranked stocks from the same industry are Atlas Financial Holdings, Inc. (AFH - Free Report) , Markel Corporation (MKL - Free Report) and Mercury General Corporation (MCY - Free Report) , each flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Atlas Financial underwrites commercial automobile insurance policies in the United States. The company delivered a four-quarter average positive surprise of 57.94%.
Markel markets and underwrites specialty insurance products in the United States and internationally. The company delivered positive surprises in the last four quarters with the average beat of 21.06%.
Mercury General writes personal automobile insurance in the United States. The company delivered positive surprises in the trailing four quarters with the average beat being 1.06%.
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