DA Davidson has maintained a Neutral rating on Broadridge Financial (NYSE: BR), with a consistent price target of $205.00.
The firm anticipates that Broadridge will announce its fiscal first-quarter results in the week of November 4th. Adjustments were made to several forecasted items, notably an increase in the expected Event Driven proxy revenue, now projected at $93 million, up from the previous estimate of $68 million.
This revision has led to an uplift in the first-quarter Non-GAAP Earnings Per Share (EPS) prediction to $1.04, rising from the earlier forecast of $0.90. However, the full-year Non-GAAP EPS forecast for fiscal 2025 remains unchanged at $8.45, marking a 9% year-over-year increase. The analyst expects that with the release of the first-quarter results for fiscal 2025, Broadridge's management will reiterate their financial guidance ranges for the fiscal year.
The report highlights the specific adjustment in the forecast for Event Driven proxy revenue as the primary factor for the increased earnings expectation for the upcoming quarter. Despite this positive adjustment for the short term, the firm's stance on Broadridge's stock remains neutral, indicating no change in their long-term expectations for the company's financial performance.
Broadridge Financial, a provider of investor communications and technology-driven solutions for broker-dealers, banks, asset managers, and corporate issuaries, is anticipated to confirm its financial outlook as it reports the first-quarter earnings, aligning with DA Davidson's projections.
In other recent news, Broadridge Financial Solutions (NYSE:BR) has made several significant developments. The company introduced Tradeverse, a new data platform aimed at transforming how trading firms manage and use their data. The platform, which consolidates real-time, multi-asset class data from various applications and platforms, is designed to reduce errors, simplify access, and maintain data integrity.
Meanwhile, Broadridge's fiscal fourth-quarter 2024 recurring and total revenues met and exceeded RBC Capital's estimates, respectively. The adjusted earnings per share (EPS) for the quarter also surpassed RBC Capital's estimates, aligning with overall market expectations. RBC Capital has subsequently increased Broadridge's share price target from $239 to $246, maintaining an Outperform rating.
Broadridge also reported robust performance for the fiscal year 2024, with record closed sales of $342 million, a 39% increase from the previous year, and a 10% growth in adjusted EPS. Additionally, the company has acquired Kyndryl SIS business in Canada, aiming to strengthen its wealth solutions in the Canadian market.
Looking ahead, Broadridge provided guidance for fiscal year 2025, projecting 5-7% organic recurring revenue growth and 8-12% adjusted EPS growth. Despite potential challenges, the company is focusing on margin expansion and core margin expansion to fund long-term growth investments.
InvestingPro Insights
To complement DA Davidson's analysis, InvestingPro data offers additional context on Broadridge Financial's financial position. The company's market capitalization stands at $25.37 billion, reflecting its significant presence in the financial technology sector. Broadridge's P/E ratio of 36.53 and adjusted P/E ratio of 33.93 for the last twelve months as of Q4 2024 suggest that investors are willing to pay a premium for the company's earnings, which aligns with the high earnings multiple noted in the InvestingPro Tips.
InvestingPro Tips highlight that Broadridge has raised its dividend for 17 consecutive years and maintained dividend payments for 18 years, demonstrating a strong commitment to shareholder returns. This is further supported by the current dividend yield of 1.62% and an impressive dividend growth of 21.38% over the last twelve months. These factors may contribute to the stock's appeal for income-focused investors, despite the neutral rating from DA Davidson.
The company's revenue growth of 7.36% over the last twelve months and quarterly growth of 5.73% in Q4 2024 indicate steady expansion, which could support the analyst's expectations for continued performance. Additionally, Broadridge's strong profitability, as evidenced by its operating income margin of 16.57% and return on assets of 8.47%, underscores its operational efficiency.
For investors seeking a deeper understanding of Broadridge's financial health and growth prospects, InvestingPro offers 12 additional tips, providing a more comprehensive analysis to inform investment decisions.
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