ICE: Trading Volumes And Prediction Markets Will Drive Long Term Opportunity

Analysts have trimmed their price targets on Intercontinental Exchange by a few dollars to reflect updated assumptions around fair value and earnings visibility, even as they point to healthy trading volumes and mixed views on mortgage technology.

Analyst Commentary

Recent Street research paints a mixed picture on Intercontinental Exchange, with several firms trimming price targets by single digits while broadly maintaining constructive views on the core exchange and data franchise.

Bullish and cautious views both center on how well the company can balance resilient trading volumes with uncertainty in its mortgage technology business and the valuation investors are willing to pay for that mix.

Bullish Takeaways

Bullish analysts are keeping positive ratings even as they trim price targets, which suggests they still see upside potential relative to current trading levels, though with a narrower margin of safety.
Updated group work on brokers, asset managers and exchanges highlights that total volumes across equities, options and futures “rose nicely” quarter over quarter, which supports the case that the core trading and clearing engine is executing well.
Comments that previously “soft” energy volumes are starting to pick back up into Q4 support the idea that key contract franchises are seeing healthier activity, an input that can support revenue resilience and underpin current valuation multiples.
The company’s position as a key infrastructure provider, including its role as owner of the NYSE and investor in prediction market platforms, reinforces the view that it remains central to several important transaction flows. Bullish analysts see this as supportive of long term growth optionality.

Bearish Takeaways

Price targets have been reduced across several firms, in some cases by more than US$20, which signals that bearish analysts are applying more conservative assumptions to earnings power and acceptable valuation multiples.
Some analysts came out of the Q3 conference call “a bit more mixed on the intermediate picture,” particularly around mortgage technology, and adjusted earnings to reflect what they see as less visibility in that segment.
References to “seemingly zealous consensus expectations” around mortgage technology suggest concern that market forecasts may still be too optimistic, which could limit upside if actual results track below those expectations.
Equal Weight type stances indicate a view that, at current levels, the risk or execution questions around areas like mortgage technology may offset the strengths of the core exchange and data franchise. This leaves less room for valuation re rating without clearer progress.

What's in the News

The New York Stock Exchange, part of Intercontinental Exchange, agreed with MSCI for NYSE to become the U.S. options listings venue for benchmark MSCI indexes in early 2026, with contracts set to trade on NYSE Arca and NYSE American, pending regulatory approval (Key Developments).
ICE and Investortools are integrating ICE Climate data into the Investortools Perform platform, giving fixed income users access to municipal level climate risk scores, value at risk metrics, and emissions data alongside ICE Bonds market data and Continuous Evaluated Pricing (Key Developments).
ICE launched TTF Daily Options on the TTF front month futures contract and reported record activity across its TTF and JKM LNG futures and options complex in 2025, with TTF futures and options at 103 million contracts traded YTD and record open interest in both TTF 1st Line and JKM futures (Key Developments).
ICE introduced the next phase of its Value at Risk based portfolio margining model, IRM 2, for more than 1,000 energy futures and options, including benchmark Brent, Gasoil, Midland WTI, Murban, TTF and EUA contracts. This is supported by new margin transparency tools such as ICE Clearing Analytics (Key Developments).
The UK Department for Energy Security & Net Zero re appointed ICE to host UK Allowance auctions for the UK Emissions Trading Scheme through 2028, extending ICE's role in the UK carbon market (Key Developments).

Valuation Changes

Fair Value: Trimmed slightly from US$190.79 to US$189.36 per share, reflecting a modestly lower central estimate.
Discount Rate: Adjusted marginally lower from 8.61% to 8.58%, indicating a small change in the assumed risk profile used in the model.
Revenue Growth: Tweaked slightly higher from 5.62% to 5.66%, pointing to a very modestly stronger top line outlook in the assumptions.
Net Profit Margin: Eased a touch from 36.16% to 36.12%, signaling a near flat view on long term profitability.
Future P/E: Brought down slightly from 32.77x to 32.50x, which implies a small reduction in the valuation multiple applied to projected earnings.

Ongoing digitization and AI integration are driving high-margin growth across trading, data, and mortgage platforms, supporting recurring revenues and improved profitability.
Expansion into global energy and data markets, plus investment in infrastructure, is creating new revenue streams and reinforcing operating scalability.
Exposure to cyclical markets, complex integrations, rising tech costs, and mounting competition and regulatory threats could undermine growth, profitability, and stability across core business segments.

Catalysts

About Intercontinental Exchange

Provides technology and data to financial institutions, corporations, and government entities in the United States, the United Kingdom, the European Union, India, Israel, Canada, and Singapore.What are the underlying business or industry changes driving this perspective?

The continued expansion and integration of ICE's global electronic trading platforms across asset classes-including record energy, interest rate, and equity contract volumes-suggests ongoing benefits from digitization and greater market electronification, which are likely to drive sustained double-digit growth in transaction revenues and operating leverage.
Intensifying demand for high-quality, real-time market data and analytics-especially to power AI-driven trading and workflow automation-has resulted in consistent growth of ICE's data and analytics businesses, supporting higher-margin, recurring revenues and improved net margins.
ICE's comprehensive end-to-end mortgage technology platform, bolstered by recent integrations and AI-powered automation, has led to new client wins and efficient scaling, pointing to further margin expansion and revenue growth as mortgage origination and servicing activity increasingly shifts to digital solutions.
Expanding global energy, natural gas, and environmental markets-propelled by shifts in cross-border capital flows, increased hedging needs, and the rise of global benchmarks like Brent and TTF-provide new opportunities for volume and fee growth, supporting both top-line and bottom-line expansion.
Ongoing build-out of proprietary data centers and connectivity infrastructure enhances scalability and efficiency, ensuring ICE can meet rising global demand for speed, resilience, and security, while lowering per-transaction costs and boosting overall earnings power.

Intercontinental Exchange Earnings and Revenue Growth

Intercontinental Exchange Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Intercontinental Exchange's revenue will grow by 5.7% annually over the next 3 years.
Analysts assume that profit margins will increase from 31.0% today to 35.8% in 3 years time.
Analysts expect earnings to reach $4.1 billion (and earnings per share of $7.38) by about September 2028, up from $3.0 billion today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 36.3x on those 2028 earnings, up from 33.1x today. This future PE is greater than the current PE for the US Capital Markets industry at 26.7x.
Analysts expect the number of shares outstanding to decline by 0.31% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.56%, as per the Simply Wall St company report.

Intercontinental Exchange Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Continued reliance on growth in energy and commodities markets exposes ICE to cyclical downturn risks and regulatory shifts (e.g., emissions or ESG changes), which could sharply reduce transaction volumes and adversely impact revenue and earnings.
Integration risks from large-scale M&A, like the Black Knight acquisition and ongoing or future deals, may create operational complexity and threaten synergy realization, potentially putting sustained pressure on net margins and overall profitability if integration is not well executed.
The shift by some mortgage technology customers to reset minimums and ongoing M&A-related attrition (e.g., Mr. Cooper's acquisition of Flagstar) highlight revenue headwinds in recurring mortgage revenues, signaling risks to both top-line growth and earnings stability in this segment.
Increasing investment in proprietary data centers and rising technology spend could become a cost drag, especially if rivals or new technologies (e.g., cloud, AI, blockchain, DeFi platforms) disrupt traditional infrastructure and lower ICE's competitiveness, thereby impacting margins and capex efficiency.
Heightened competition from low-cost trading platforms, potential fee compression in exchanges, alternative trading systems/dark pools siphoning volumes, and rising cyberattack risks in digital infrastructure threaten ICE's core trading revenues and could require increasing spend on security and compliance-dampening net income and earnings growth over the long term.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $204.375 for Intercontinental Exchange based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $227.0, and the most bearish reporting a price target of just $170.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $11.4 billion, earnings will come to $4.1 billion, and it would be trading on a PE ratio of 36.3x, assuming you use a discount rate of 8.6%.
Given the current share price of $173.46, the analyst price target of $204.38 is 15.1% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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