Intercontinental Exchange’s Q2 Results Miss Analysts’ Expectations

Intercontinental Exchange, Inc. (ICE) posted disappointing Q2 results. The company operates global exchanges and clearing houses and provides financial technology and data services across multiple asset classes.

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The company reported Q2 adjusted earnings of $1.16 per share, up 12% on a year-over-year basis, but missed the Street’s estimates of $1.17. Net revenues jumped 22% to $1.7 billion, missing analysts’ expectations of $1.72 billion.

The quarterly results were supported by the outstanding performance of the Mortgage Technology segment, which recorded a significant rise in revenues on a year-over-year basis. Additionally, Exchanges segment revenue rose 2%, while a 3% increase was recorded in the Fixed Income and Data Services segment. (See Intercontinental Exchange stock charts on TipRanks)

Intercontinental Exchange CEO Jeffrey C. Sprecher said, “As we look to the second half of the year and beyond, we will continue to leverage our data, technology & network expertise to deliver innovative solutions for our customers and drive growth for our stockholders.”

For Q321, the company projects total recurring revenues to be in a range of $870 million to $885 million.

Additionally, the company announced an increased quarterly cash dividend of $0.33 per share, up 10% from the prior dividend paid. The new dividend will be paid on September 30 to shareholders of record as of September 16. The company’s annual dividend of $1.32 per share now reflects a dividend yield of 1.09%.

Last month, Goldman Sachs analyst Alexander Blostein reiterated a Buy rating on the stock and a price target of $141 (16.7% upside potential).

Supporting his bullish stance, in a note to investors, Blostein said that Intercontinental Exchange seems to be one of the greatest laggards in its sector currently, and now trades at a “significant discount” to its peers across exchange and data service companies.

Currently, the company’s valuation is at a 24% discount to the implied sum-of-the-parts, the analyst added.

Consensus among analysts is a Strong Buy based on 8 Buys versus 1 Hold. The average Intercontinental Exchange price target of $132.56 implies 9.7% upside potential from current levels. Shares have gained 28% over the past year.

Intercontinental Exchange scores a “Perfect 10” from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.