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Lake Success, New York-based Broadridge Financial Solutions, Inc. (BR) provides investor communications and technology-driven solutions for the financial services industry. With a market cap of $26.9 billion, it operates through Investor Communication Solutions, Global Technology and Operations, and other segments.
Broadridge Financial has lagged behind the broader market over the past year. BR stock has gained 11.9% in 2024 and 23.3% over the past year, underperforming the S&P 500 Index’s ($SPX) surge of 25.2% in 2024 and 31% over the past year.
Narrowing the focus, Broadridge Financial has also underperformed the Technology Select Sector SPDR Fund’s (XLK) 21.4% gains on a YTD basis and 26.4% returns over the past year.
Broadridge Financial Solutions’ stock surged 4.1% after the release of its Q1 earnings on Nov. 5. The company reported a notable 3.3% year-over-year growth on a reported basis and approximately 4% growth on a constant currency basis in recurring revenues, reaching $900.3 million. Moreover, the company also raised its full-year constant currency recurring revenue growth guidance from the previously announced 5%-7% to 6%-8%, reflecting strong organic growth and the impact of Kyndryl's Securities Industry Services business’ acquisition which would provide wealth management, capital markets, and information technology solutions in Canada, expanding the Company's product offerings in the Global Technology and Operations segment.
Additionally, Broadridge’s adjusted EPS of $1 was in line with analysts’ consensus estimates and the company reaffirmed its full-year adjusted EPS guidance of 8%-12%, bolstering investor confidence.
For the current fiscal year, ending in June 2025, analysts expect BR to report a 10.4% year-over-year growth in adjusted EPS to $8.53. Moreover, the company has a robust earnings surprise history. It has surpassed or matched analysts’ earnings estimates in the past four quarters.
BR stock has a consensus “Moderate Buy” rating overall. Among the eight analysts, one recommends a “Strong Buy,” two advises “Moderate Buy,” and five suggest a “Hold” rating.
On Nov. 6, RBC Capital analyst Daniel Perlin maintained a “Buy” rating with a price target of $246 indicating an upside potential of 6.8% from current price levels.
As of writing, BR is trading slightly above its mean price target of $229.14. The Street-high price target of $250 represents a premium of just 8.6% to current price levels.
