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Intercontinental Exchange Inc ICE

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Morningstar’s Analysis

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ICE's Mortgage Technology Segment Continues to Impress in Q3 as Share Buybacks Resume

Michael Miller Equity Analyst

Analyst Note

| Michael Miller |

Intercontinental Exchange reported good third-quarter results as energy volatility drove excellent results for its futures exchange business and its mortgage technology business performed surprisingly well, given the environment for mortgages. Net revenue grew 11% year over year and 5.6% sequentially, and net income was $1.30 per share. As we incorporate these results, we are raising our fair value estimate to $126 per share from $120. A dollar of our change is from earnings since our last update, $2 is from an adjustment for the market value of ICE’s stake in Bakkt, and $4 comes from higher revenue projections for the mortgage technology business. These positive adjustments were offset by higher compensation expense expectations.

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Company Profile

Business Description

Intercontinental Exchange is a vertically integrated operator of financial exchanges and provides ancillary data products. Though the company is probably best known for its ownership of the New York Stock Exchange, which it acquired in 2013, ICE operates a large derivatives exchange, too. The company's largest commodity futures product is the ICE Brent crude futures contract. In addition to the exchanges business, which is about 55% of net revenue, Intercontinental Exchange has used a series of acquisitions to create its mortgage technology business (18% of net revenue) and fixed-income and data services segment (27% of net revenue).

5660 New Northside Drive, 3rd Floor
Atlanta, GA, 30328
T +1 770 857-4700
Sector Financial Services
Industry Financial Data & Stock Exchanges
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Cyclical
Employees 9,381