Intercontinental Exchange Trades Above 200-Day SMA: Time to Hold?

Intercontinental Exchange Inc. ICE has been trading above its 200-day simple moving average (SMA), signaling a short-term bullish trend. Its share price, as of Wednesday, was $177.30, down 6.3% from its 52-week high of $189.35.The 200-day SMA is a technical indicator that shows the average closing price of a stock or asset over the last 200 trading days, helping to identify the long-term trend. This long-term moving average serves as a "line in the sand" for market direction, with the moving average line itself acting as a potential indicator of support or resistance.Image Source: Zacks Investment ResearchWith a capitalization of $101.49 billion, Intercontinental Exchange is the largest futures exchange in the world in terms of trading volume and notional value traded. The average number of shares traded in the last three months was 2.5 million.ICE is an OutperformerShares of Intercontinental Exchange have gained 19% year to date, outperforming its industry, the Finance sector, and the Zacks S&P 500 composite’s growth of 15.5%, 12.5% and 9.8%, respectively. Intercontinental Exchange has outperformed its peers, CME Group Inc. CME and OTC Markets Group Inc. OTCM, which have risen 16.3% and 2.8%, respectively, year to date. Meanwhile, shares of Nasdaq, Inc. NDAQ have gained 22.7% year to date.Image Source: Zacks Investment ResearchICE Shares are AffordableIntercontinental Exchange shares are trading at a forward price-to-earnings of 23.71X, lower than the industry average of 26.35X. Its pricing, at a discount to the industry average, gives a better entry point to investors.Image Source: Zacks Investment ResearchICE’s Growth Projection EncouragesThe Zacks Consensus Estimate for Intercontinental Exchange’s 2025 earnings per share indicates a year-over-year increase of 15.1%. The consensus estimate for revenues is pegged at $10 billion, implying a year-over-year improvement of 7.7%. The consensus estimate for 2026 earnings per share and revenues indicates an increase of 10.7% and 5.6%, respectively, from the corresponding 2025 estimates. The expected long-term earnings growth rate is 12%, outperforming the industry average of 10.4%.Optimistic Analyst Sentiment on ICEEight of the 11 analysts covering the stock have raised estimates for 2025, while six analysts have raised the same for 2026 over the past 60 days. Thus, the Zacks Consensus Estimate for both 2025 and 2026 moved 0.7% north in the last 60 days.Image Source: Zacks Investment ResearchAverage Target Price for ICE Suggests UpsideBased on short-term price targets offered by 17 analysts, the Zacks average price target is $206.76 per share. The average suggests a potential 15.68% upside from the last closing price.Image Source: Zacks Investment ResearchEarnings Surprise HistoryIntercontinental Exchange surpassed earnings estimates in three of the last four quarters and matched in one, the average being 1.36%.FactorsImpacting ICE StockICE’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.End NotesICE 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. 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(OTCM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks