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solzberg in Gainers & Losers,

ICE stock to reach $280 in medium term

Intercontinental Exchange (ICE), an operator of global commodity and financial products marketplaces, issued solid financials for the third quarter of 2015. Revenues, less transaction-based expenses, increased 9.5% y-o-y to $816 mn, exceeding consensus estimate of $812 mn, on the back of 11.7% rise in net transaction and clearing fees, as well as growth in data services and listings fees of 22.9% and 9.8%, respectively, to record levels. Operating expenses declined 9.4%, and operating income surged 33.3% to $440 mn resulting in operating margin improvement of 960 basis points to 53.9%. Adjusted earnings per share jumped 24% to $2.91. In Q3, the company returned $290 mn to its shareholders via dividends and buybacks taking the year to date tally to about $847 mn.

ICE’s Q3 performance represents its fourth consecutive quarter of double-digit earnings growth driven by its focus on its customers, new product launches and cost cutting initiatives. I also positively value ICE’s activity on M&A front. In October, the company announced a $5.2 bn acquisition of Interactive Data Holdings, specializing in pricing corporate bonds. The deal will allow ICE to further expand its data services business, its fastest-growing source of revenues.

In my opinion, ICE’s shares will continue growth in medium term. Target price is $280.