Tuesday, October 31, 2006

Calls of Note Part 2

- Goldman Sachs is adding IntercontinentalExchange (NYSE:ICE) to their Conviction Buy List saying selling in the wake of the recent lock-up expiration has pressured the shares, even as fundamentals have continued to exceed expectations. Recent strength has been broad-based across futures and OTC products, shaking off threats from NYMEX and concern over potential dislocation in the natural gas markets. As a result, they are raising their estimates to reflect increased confidence in 2007 growth and see 34% of upside in the shares to new 12-month price target of $110 (from $79). Firm's Street-high 2007 earnings estimate of $3.05 reflects their assumption for approximately 25% growth in underlying drivers, which they believe is conservative.
Catalyst: Firm expects the release of October OTC commissions on Thursday (in conjunction
with a positive, but uneventful earnings report) to be a positive catalyst for the stock.

Notablecalls: This one is so much better than the CSCO call. The tgt goes up nicely and the rationale behind the raise is sound. I expect to see some buy interest in ICE but would keep it on a tight leash as the chart is telling me it may want to go lower before moving up.

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