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ICE Stock Trading at a Discount to Industry at 20.03X: Time to Hold?
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Key Takeaways
ICE's top line is poised to improve on strength in global data services, index business and mortgage tech.
Growth in pricing and reference data, ICE Global Network, feeds and derivatives analytics supports revenue.
ICE expects Mortgage Technology revenue to grow in the low-to-mid single digits in 2026 on digital adoption.
Intercontinental Exchange Inc. (ICE - Free Report) shares are trading at a discount compared with the Zacks Securities and Exchanges industry. Intercontinental shares are trading at a forward price-to-earnings of 20.03X, lower than the industry average of 22.52X and the Zacks S&P 500 composite’s 21.63X.
Shares of Nasdaq, Inc. (NDAQ - Free Report) are also trading at a discount to the industry average, while Cboe Global Markets, Inc. (CBOE - Free Report) and CME Group Inc. (CME - Free Report) shares are trading at a multiple higher than the industry average.
Image Source: Zacks Investment Research
With a market capitalization of $89.60 billion, the average volume of shares traded in the last three months was 3.72 million.
ICE Price Performance
Shares of Intercontinental Exchange have lost 2.9% year to date compared with the industry and the Finance sector’s decline of 4.7% and 4.5%, respectively.
Image Source: Zacks Investment Research
ICE’s Growth Projection Encourages
The Zacks Consensus Estimate for Intercontinental Exchange’s 2026 earnings per share indicates a year-over-year increase of 10.2%. The estimate for 2026 revenues is pegged at $10.60 billion, implying a year-over-year improvement of 6.7%.
The consensus estimate for 2027 earnings per share and revenues indicates an increase of 11% and 5.4%, respectively, from the corresponding 2026 estimates.
Average Target Price for ICE Suggests Upside
Based on short-term price targets offered by 18 analysts, the Zacks average price target is $198.07 per share. The average suggests a potential 23.1% upside from the last closing price.
Image Source: Zacks Investment Research
Factors Acting in Favor 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.
Continued adoption of digital solutions, MSP mortgage servicing system revenues and default management revenues are expected to drive Mortgage Technology’s revenues. For 2026, the company expects total revenue growth in the Mortgage Technology revenues in the low-to-mid single digits. The company continues to make strategic investments across the business for future profitable growth opportunities.
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.
Risks for ICE
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.
Conclusion
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.
Favorable growth estimates, as well as attractive valuations, should continue to benefit ICE over the long term.
View the Zacks #1 Rank List
Image: Bigstock
ICE Stock Trading at a Discount to Industry at 20.03X: Time to Hold?
Key Takeaways
Intercontinental Exchange Inc. (ICE - Free Report) shares are trading at a discount compared with the Zacks Securities and Exchanges industry. Intercontinental shares are trading at a forward price-to-earnings of 20.03X, lower than the industry average of 22.52X and the Zacks S&P 500 composite’s 21.63X.
Shares of Nasdaq, Inc. (NDAQ - Free Report) are also trading at a discount to the industry average, while Cboe Global Markets, Inc. (CBOE - Free Report) and CME Group Inc. (CME - Free Report) shares are trading at a multiple higher than the industry average.
Image Source: Zacks Investment Research
With a market capitalization of $89.60 billion, the average volume of shares traded in the last three months was 3.72 million.
ICE Price Performance
Shares of Intercontinental Exchange have lost 2.9% year to date compared with the industry and the Finance sector’s decline of 4.7% and 4.5%, respectively.
Image Source: Zacks Investment Research
ICE’s Growth Projection Encourages
The Zacks Consensus Estimate for Intercontinental Exchange’s 2026 earnings per share indicates a year-over-year increase of 10.2%. The estimate for 2026 revenues is pegged at $10.60 billion, implying a year-over-year improvement of 6.7%.
The consensus estimate for 2027 earnings per share and revenues indicates an increase of 11% and 5.4%, respectively, from the corresponding 2026 estimates.
Average Target Price for ICE Suggests Upside
Based on short-term price targets offered by 18 analysts, the Zacks average price target is $198.07 per share. The average suggests a potential 23.1% upside from the last closing price.
Image Source: Zacks Investment Research
Factors Acting in Favor 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.
Continued adoption of digital solutions, MSP mortgage servicing system revenues and default management revenues are expected to drive Mortgage Technology’s revenues. For 2026, the company expects total revenue growth in the Mortgage Technology revenues in the low-to-mid single digits. The company continues to make strategic investments across the business for future profitable growth opportunities.
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.
Risks for ICE
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.
Conclusion
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.
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.