Yahoo Finance Why You Should Retain Broadridge Financial (BR) Stock Now
Broadridge Financial Solutions, Inc. BR has had an impressive run over the past year. The stock has gained 28%, significantly outperforming the 14% growth of the industry it belongs to and the 23% rally of the Zacks S&P 500 composite.
The company’s earnings for fiscal 2024 and 2025 are expected to improve 10% and 9%, respectively, year over year. Revenues are expected to increase 8% in fiscal 2024 and 5.5% in fiscal 2025.
Broadridge Financial Solutions, Inc. Price
Broadridge Financial Solutions, Inc. price | Broadridge Financial Solutions, Inc. Quote
Factors That Augur Well
Fundamental trends like growing demand for data and analytics, mutualization and digitization are likely to help drive sales growth. Broadridge’s capital markets and wealth management businesses are likely to remain in good shape as long as uncertainty-induced market volatility is prevalent. Revenues increased 6.2% in fiscal 2023, and we expect a 7.6% year-over-year increase in fiscal 2024 revenues.
The Investor Communication Solutions (ICS) segment is likely to deliver continued growth driven by demand trends in its regulatory, data-driven fund, corporate issuer and customer communications solutions. A particularly large portion of the business involves the processing and distribution of proxy materials to investors and the ProxyEdge tool. ICS revenues increased 6.6% in fiscal 2023, and we are currently expecting around a 7% year-over-year increase in fiscal 2024.
Increasing presence in EMEA and APAC through the Itiviti acquisition has boosted Broadridge’s global technology and operations segment. The segment's revenues increased 5% year over year in fiscal 2023 and we expect them to be up 9.5% in fiscal 2024. Itiviti is an effective strategic fit for Broadridge’s capital market franchise and contributes significantly to the company’s international revenue growth.
The recent acquisition of AdvisorTarget is expected to expand Broadridge’s capabilities in digital distribution and marketing for asset management and wealth firms, thereby strengthening the company’s market position and driving growth in the digital marketing space. The buyout will bolster the company's suite of tools, combining AdvisorTarget’s advanced marketing automation and analytics technology.
Some Risks
Client concentration is a major risk for Broadridge. It primarily serves clients in the financial services industry. In each of its fiscal years 2023, 2022 and 2021, the largest single client accounted for roughly 7%, 7% and 6% of the company's consolidated revenues, respectively.
Broadridge is heavily exposed to the securities industry (including brokerages and asset managers). A material downturn in the markets will likely have a negative bearing on this industry and affect the company’s business.
Zacks Rank and Stocks to Consider
Broadridge currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Business Services sector are Western Union WU and AppLovin APP.
Western Union sports a Zacks Rank of 1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
WU has a long-term earnings growth expectation of 3.9%. It delivered a trailing four-quarter earnings surprise of 15.7%, on average.
AppLovin currently flaunts a Zacks Rank of 1. It has a long-term earnings growth expectation of 20%. APP delivered a trailing four-quarter earnings surprise of 60.9%, on average.
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Broadridge Financial Solutions, Inc. (BR) : Free Stock Analysis Report
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