How Is IntercontinentalExchange Going To Grow In The Next 3 Years?
IntercontinentalExchange Group (NYSE:ICE) has seen impressive growth in recent years. Revenue grew at a CAGR of 40% and its stock price jumped 2.8x in the last 5 years. Strengthening its data services segment with a series of acquisitions, including NYSE, SuperDerivatives, IDC and Trayport, has paid off well for the company. We expect ICE to broaden its offerings to cater to additional markets going forward, and add further technology platforms and expand its risk management, new data and valuation services. This is likely to propel further growth in this segment in the future. With the improvement in U.S. macro conditions and innovative trading algorithms, we also expect improvement in equity trading volumes and revenue.
We have an $82 price estimate for Intercontinental Exchange’s stock, which is about 20% ahead of the current market price. We have also created an interactive dashboard which shows the forecast trends; you can modify the key value drivers to see how they impact the company’s revenues and bottom-line.
- Up 24% Since The Start Of 2023, What To Expect From Intercontinental Exchange Stock After Q4 Results?
- Up 7% In The Last One Month, Where Is Intercontinental Exchange Stock Headed?
- Where Is Intercontinental Exchange Stock Headed?
- Intercontinental Exchange Stock Is Trading Below Its Fair Value
- Intercontinental Exchange Stock To Edge Past the Expectations In Q4
- Forecast Of The Day: Intercontinental Exchange Data Services Revenue
Derivative revenues have continued to grow at an impressive rate over the past few years, largely driven by the phenomenal growth in energy, interest rate and metal derivative volumes. We expect interest rate derivative volumes to continue growing amid improving macro conditions and further rate hikes in the coming years. Energy derivatives should continue to witness growth due to fluctuations in oil prices amid OPEC’s changing stance on capping production.
ICE has seen market share pressure due to pressure from competing exchanges. It is likely that the company will keep transaction prices in check due to significant competitive pressure and gain volumes. This will put pressure on the company’s trading margins in the near term. However, the growth in data services margins should offset the decline in trading margins. Additionally, a significant boost in revenues and the recent corporate tax overhaul should drive the exchange’s net income going forward.
See the full Trefis analysis for Intercontinental Exchange