Citigroup 'Cools' On Intercontinental Exchange

Neil Stratton of Citigroup downgraded shares of Intercontinental Exchange Inc (NYSE: ICE) on Friday to Neutral from Buy despite raising his price target to $240 from a previous $226.

Stratton notes that shares of Intercontinental Exchange appreciated approximately 17 percent quarter-to-date, outperforming its peers return at around 10 percent and the 5 percent appreciation in the S&P 500. The analyst adds that further upside is dependent on driving top line growth and while the company sees opportunities, shares have a balanced risk/reward profile.

Stratton thinks that volume pressures could abate in 2015 while market data and listings businesses will drive year-over-year growth. And the company's clearing business should also grow. In addition, management's $1.65 billion capital return plans throughout 2015 provides further shareholder value.

“While we do see opportunities to drive revenue ahead, Intercontinental Exchange's year-to-date under-performance is now less pronounced and the risk/reward is less attractive, in our view,” Stratton concluded.