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ICE Poised to Grow on Core & Inorganic Strength; Runs Risks

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On Dec 22, 2015, we issued an updated research report on Intercontinental Exchange Inc.ICE .

Intercontinental Exchange develops and offers an array of products and a broad range of risk management services including trade execution, market data, pre- and post-trade processing and clearing services on an integrated platform. The company continues to improve its clearing and risk management services, adding a diversified revenue source.

ICE operates 11 exchanges and 7 clearinghouses, covering 9 asset classes.

Also, ICE has a history of strategic buyouts. Recently, the company took over Interactive Data Corporation, a premier valuation provider in the global fixed-income market, and Trayport which enabled it to offer new services to the European over-the-counter energy markets, including power, natural gas and coal.

Riding on the back of sustained operational strength, ICE enjoys a solid balance sheet with strong cash, receivables and capital position.

However, stiff competition, low interest rate, challenging regulations and volatile industry trends are the concerns. Moreover, weak volumes are a drag on margins.

ICE's third-quarter 2015 earnings matched our estimates and improved year over year. With respect to the surprise trend, this Zacks Rank #3 (Hold) securities exchange delivered positive surprises in three of last four quarters, with an average beat of 2.3%.

The Zacks Consensus Estimate for 2015 and 2016 is currently pegged at $11.84 and $14.03, respectively. These translate into a year-over-year increase of 22.95% for 2015 and 18.52% for 2016.

Stocks to Consider

Some better-ranked stocks from the same sector are MarketAxess Holdings Inc. MKTX , Arbor Realty Trust Inc. ABR and Federal Agricultural Mortgage Corp AGM . While Arbor Realty Trust and Federal Agricultural Mortgage sport a Zacks Rank #1 (Strong Buy), MarketAxess carries a Zacks Rank #2 (Buy).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

INTERCONTNTLEXC (ICE): Free Stock Analysis Report

MARKETAXESS HLD (MKTX): Free Stock Analysis Report

ARBOR RLTY TRST (ABR): Free Stock Analysis Report

FED AGRIC MTG-C (AGM): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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