ICE - Embedded Expectations Analysis - 2021 07 20
Intercontinental Exchange, Inc. (ICE:USA) currently trades above recent averages relative to UAFRS-based (Uniform) earnings, with a 28.2x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, and management is confident about delivery price contracts, revenue performance, and their automation technology.Specifically, management is confident their model of organizing commodities on futures exchanges enables the market to control pricing at the point of production, while their delivery price contracts minimize risks to producers. Also, they are confident their first quarter results were the best in company history and additional Bakkht expenses will be more than offset by higher revenues. Furthermore, they are confident their leading environmental complex positions them to help customers navigate global energy markets and their automated document recognition and extraction technology compares the income and credit qualifications for loan origination.
Intercontinental Exchange is a holding company. Through its subsidiaries, the company is a global operator of regulated exchanges, clearing houses and listings venues, and a provider of data services for commodity, financial, fixed income and equity markets. The company operates regulated marketplaces for listing, trading and clearing an array of derivatives contracts and securities across primary asset classes, including metals, equities, bonds and currencies, and also provides mortgage and technology services. In addition, the company provides data services to support the trading, investment, risk management and connectivity needs of customers. The company has two segments: Trading and Clearing and Data and Listings.
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