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ICE – Market expectations are for Uniform ROA to compress, and management may have concerns about initiatives, products, and guidance

March 11, 2022

  • Intercontinental Exchange (ICE) currently trades above corporate and recent averages relative to Uniform earnings, with a 25.3x Uniform P/E (Fwd. V/E’).
  • At these levels, markets are pricing in expectations for Uniform ROA to compress to 51%, accompanied by 7% Uniform asset growth.
  • Similarly, analysts expect Uniform ROA to decline to 52% in 2023, accompanied by 5% Uniform asset growth.
  • If sustained going forward, these levels would imply a stock price closer to $128, representing approximately 6% equity downside for the firm.
  • Moreover, the firm’s most recent earnings call suggests management may have concerns about initiatives, products, and guidance.
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