Citi sees improving signals for Intercontinental Exchange, raises to buy

Citi analysts upgraded shares of Intercontinental Exchange (NYSE:) to Buy from Neutral in a note Friday, raising the price target on the stock to $130 from $117 per share.

The analysts told investors they see improving signals for the exchange company across its platform.

“Post a 2Q23 earnings beat, ICE finished down 2.55% as a lowered mortgage technology recurring revenue guide weighed on the stock,” said the analysts. “The lowered guide was not overly surprising in our view, and given better than expected pricing trends thru July in trading, a tick up in mortgage transactional activity, improving FICC data outlook and a lower expense trajectory, we are raising estimates.”

“Our ‘2023/2024/2025 EPS estimates move to $5.72/6.48/7.16,” they added. “Our ’24/25 EPS estimates are now 6%/8% above consensus.”

The firm sees upside potential to its numbers, particularly in the exchange and FICC segments, and they view the stock as having an attractive risk/reward.