10 Best Financial Services Stocks To Buy According to Analysts

2. Intercontinental Exchange Inc. (NYSE:ICE)

Upside Potential as of January 9: 19.44%

Intercontinental Exchange, Inc. (NYSE:ICE), one of the Best Financial Stocks, provides supplemental data products and manages vertically integrated financial exchanges. The company runs a significant derivatives exchange, but its most widely recognized asset is the New York Stock Exchange, which it purchased in 2013. The company’s biggest commodity futures offering is the ICE Brent crude futures contract. In addition to its exchanges business, which contributes to about 54% of net revenue, Intercontinental Exchange has acquired a number of companies to develop its mortgage technology business (22% of net revenue) and fixed-income and data services division (24% of net revenue).

Intercontinental Exchange, Inc. (NYSE:ICE) revealed record transaction revenues of $1.1 billion and record recurring revenues of $1.2 billion in Q3 2024, which helped the company’s net sales reach a new high of $2.3 billion, up 17.27% year over year. A record high of $1.55 was also achieved by adjusted earnings per share, while adjusted pro forma operating income climbed by 12% annually to a record $1.4 billion. The Exchange division’s net sales, which rose 12% year over year to a record $1.3 billion, highlight its outstanding performance. Transaction revenues for this segment increased by 17% to $890 million, mostly due to a 23% increase in energy revenues and a 34% increase in interest rate business.

The Fixed Income and Data Services segment experienced a considerable increase, with record revenues of $586 million. The segment’s recurring revenues increased by 6% from the prior year to a record $461 million. Growth in the index business was roughly 30% year over year. Additionally, Intercontinental Exchange, Inc. (NYSE:ICE) made significant progress in debt reduction, wiping out almost $600 million in outstanding debt during the quarter and ending with an adjusted leverage ratio of about 3.5 times EBITDA.

Aristotle Core Equity Strategy stated the following regarding Intercontinental Exchange, Inc. (NYSE:ICE) in its Q3 2024 investor letter:

“Intercontinental Exchange, Inc. (NYSE:ICE) contributed to portfolio performance in the third quarter, driven by continued strength in the company’s Exchanges segment and expectations that the Mortgage Technology segment’s revenues have troughed ahead of an eventual recovery in U.S. housing market activity. Exchanges’ revenues continue to be driven by growth in energy and interest rate futures trading volumes, with energy trading activity expected to remain elevated, primarily bolstered by increasing data center-driven electricity demand.”

Natixis Global Asset Management’s Harris Associates was the largest stakeholder in the company among the funds in Insider Monkey’s database at the end of Q3 2024. It owns 13.29 million shares worth $2.14 billion as of Q3.