UPDATE 1-RESEARCH ALERT-ICE shares tumble on Goldman downgrade

martedì 6 gennaio 2009 16:51

Jan 6 (Reuters) - IntercontinentalExchange Inc (ICE.N: Quotazione) fell more than 15 percent, after Goldman Sachs cut its rating on the futures exchange to "neutral" from "buy" and removed the stock from its conviction buy list, citing lower commissions from energy business.

On Jan 5, Atlanta-based ICE said its fourth-quarter commissions from the energy business had lagged both the previous quarter and the year-earlier period.

"The announcement of the first year-over-year decline in OTC commissions since 2003 cast a shadow over our favorable view of ICE," Goldman analyst Daniel Harris said in a research note.

Jefferies & Co also cut its price target on ICE to $75 from $80, citing slowing volumes in the exchange's energy markets. The brokerage, however, maintained its "hold" rating on the stock.

Jefferies analyst Daniel Fannon said while the exchange had several initiatives lined up for 2009, volumes within its core energy markets have been slowing for months, fuelling the brokerage's concerns.

In its over-the-counter energy business, ICE posted average daily commissions of $870,934, a fall of 22 percent from the $1.1 million it reported in the previous quarter.

Both Goldman and Jefferies slashed their fourth-quarter and 2009 estimates for the futures exchange.

ICE shares were down more than 15 percent at $61.80 in early trade on the New York Stock Exchange. (Reporting by Dinesh Nair; Editing by Anil D'Silva)