Intercontinental Exchange, Inc. (ICE - Free Report) is well-poised for growth based on a compelling product and service suite, timely achievement of cost synergies and effective capital deployment. With more than $1 trillion in benchmark assets under management, the Zacks Rank #3 (Hold) company boasts being the second-largest fixed income provider globally. It has an expected long-term earnings growth rate of 8.2%, better than the industry average of 7.3%.
Estimates for Intercontinental Exchange have been revised upward over the past 30 days, reflecting analysts’ confidence in the stock. The Zacks Consensus Estimate for 2019 earnings per share has moved 0.3% north.
Intercontinental Exchange has a solid surprise history having delivered positive surprise in the last seven quarters, with the average beat being 2.57%.
Intercontinental Exchange’s return on equity — a profitability measure — is 12.2%, better than the industry average of 111%.This reflects the company’s efficiency in utilizing its shareholders’ funds.
Intercontinental Exchange has a decent revenue growth story driven its compelling product and service suite along with strategic acquisitions. Given its strength in global data services, management expects data revenues to increase sequentially to a range of $550 million - $555 million.
An impressive history of acquisitions has not only fueled its growth but also helped it to achieve expense synergies. Management is on track with the targeted 2019 synergies of at least $30 million that will enable the company to attain its initial commitment of $180 million in synergies.
A strong balance sheet and capital position helps the company pursue strategic growth opportunities and effectively deploy capital. A 15% hike in its quarterly dividend during the first quarter of 2019 marked the fifth consecutive double-digit hike in dividend since its initiation in December 2013.
Shares of Intercontinental Exchange have gained 8.6% year to date, outperforming the industry's rise of 7.8%. We expect solid operational performance to drive shares going ahead.
The Zacks Consensus Estimate for 2019 earnings per share is pegged at $3.74, indicating 4.2% year-over-year rise on 3.3% higher revenues of $5.2 billion. For 2020, the consensus mark for earnings is pegged at $4.15, indicating 11.1% year-over-year growth. Revenues are expected to increase 5.5% to $5.4 billion.
Stocks to Consider
Some better-ranked stocks from the finance sector are Argo Group International Holdings, Ltd. (ARGO - Free Report) , Ameriprise Financial, Inc. (AMP - Free Report) and BlackRock, Inc. (BLK - Free Report) . 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.
Argo Group underwrites specialty insurance and reinsurance products in the property and casualty markets. The company delivered four-quarter average positive surprise of 224.07%.
Ameriprise Financial provides various financial products and services to individual and institutional clients in the United States and internationally. The company delivered four-quarter average positive surprise of 3.33%.
BlackRock is a publicly owned investment manager. The company delivered four-quarter average positive surprise of 2.95%.
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