Why IntercontinentalExchange (ICE) Shares Could Climb Higher

Story updated at 9:45 a.m. to reflect market changes.

NEW YORK (TheStreet) -- IntercontinentalExchange (ICE) may climb as high as $230 a share according to BMO Capital.

IntercontinentalExchange lost 1.1% to $214.03 in morning trading Wednesday.

The analyst firm maintained its "outperform" rating for the company along with the new price target. BMO also raised its estimates for IntercontinentalExchange through 2015. The firm says the company's efforts to cut costs are the cause for the increased numbers.

TheStreet Ratings team rates INTERCONTINENTALEXCHANGE GRP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate INTERCONTINENTALEXCHANGE GRP (ICE) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, revenue growth, reasonable valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 44.89% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, ICE should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • INTERCONTINENTALEXCHANGE GRP has improved earnings per share by 7.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, INTERCONTINENTALEXCHANGE GRP increased its bottom line by earning $7.52 versus $6.91 in the prior year. This year, the market expects an improvement in earnings ($8.18 versus $7.52).
  • Despite its growing revenue, the company underperformed as compared with the industry average of 13.4%. Since the same quarter one year prior, revenues slightly increased by 4.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The gross profit margin for INTERCONTINENTALEXCHANGE GRP is currently very high, coming in at 80.85%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 41.82% significantly outperformed against the industry average.
  • You can view the full analysis from the report here: ICE Ratings Report
 

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