Intercontinental Exchange (ICE), mcap=$60bn, price $107 vs $94

– An exceptional business trading just slightly above market at 16.5x PE.
– Extremely high margins.
– High free cash flow conversion.
– Leading market share.
– Big moats around its businesses.
– History of exceptional capital allocation.
– Consistent 17% EPS CAGR.
– Market’s concerns over mortgage business earnings are overexaggerated, as in a worst-case scenario that would only be a 10% hit on PE.
– Should deserve premium to the market multiple.

– On current consensus estimates ICE trades at 17x PE.
– In this worst-case scenario, with EPS of $4.73 versus a consensus of $5.42 for 2022, ICE shares are trading at a P/E of 20x 2022 PE.

Exp. gain: Not specified.

Full $ICE write-up (free guest account required):

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