UPDATE: Deutsche Bank Upgrades Intercontinental Exchange Inc

On Thursday, Brian Bedell of Deutsche Bank released a year-end strategy report on Brokers, Asset Managers and Exchanges. The analyst favors owning shares of Intercontinental Exchange Inc (NYSE: ICE) along with Nasdaq OMX Group, Inc (NASDAQ: NDAQ).

The two exchanges offer investors “earnings per share growth/valuation stories though still benefiting from higher volumes.”

“With the acquisition of NYX and its interest rate futures business, we see ICE now being in its strongest competitive position in the derivative exchange arena, and we think management's solid record of innovation and business execution will prove to create exceptional long-term shareholder value,” Bedell wrote. However, the analyst said that ICE's relative price to earnings ratio will remain “well below” its longer-term average given slower growth following the NYX acquisition.

Shares remain attractive even with a lower price to earnings ratio, according to Bedell, who expects the exchange provider to post double-digit earnings per share growth over the next two years.

Shares were upgraded to Buy from Hold with a price target raised to $219 from $202.