Broadridge (BR) Appreciates 6.6% in Three Months: Here's Why
Broadridge Financial Solutions, Inc. BR shares have gained 6.6% in the past three months against the 3.5% decline of the industry it belongs to and the 5.3% rise of the Zacks S&P 500 composite.
Reasons Behind the Rally
Broadridge registered growth in both earnings and revenues in the second quarter of fiscal 2023. Adjusted earnings of 91 cents per share increased 9.6% year over year and total revenues of $1.3 billion were up 2.6% year over year. Recurring revenues of $840 million increased 6% from the year-ago quarter’s level.
Broadridge Financial Solutions, Inc. Revenue (TTM)
Broadridge Financial Solutions, Inc. revenue-ttm | Broadridge Financial Solutions, Inc. Quote
The company provided impressive guidance for fiscal 2023. It expects recurring revenue growth to be 6-9%, adjusted earnings per share growth to be 7-11% and adjusted operating income margin to be up by around 50 bps.
Broadridge’s business is currently benefiting from positive trends such as strong growth in equity and fund records, transformation and digitization of the financial services industry, governance innovation through multiple product launches and an increase in omni-channel customer communication wins.
The company’s Global Technology and Operations business looks well poised to be driven by the Itiviti acquisition. Itiviti is an effective strategic fit for Broadridge’s capital market franchise and contributes significantly to the company’s international revenue growth.
With an increasing demand for technology solutions, Broadridge has ramped up investments in digital and technology platforms. These investments should be beneficial, especially in the post-COVID era, which is expected to see consistent healthy demand for technology solutions.
Zacks Rank and Stocks to Consider
Broadridge currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Business Services sector are ICF International ICFI and Gartner, Inc. IT.
For first-quarter 2023, ICFI’s earnings are expected to increase 7.6% from the year-ago reported figure to $1.41. The company’s earnings are expected to grow 9.2% on a year-over-year basis in 2023.
The Zacks Consensus Estimate for the company’s first-quarter 2023 earnings is pegged at $1.41, which has been revised upward by 6% in the past 60 days. The consensus estimate for the full year stands at $6.3 per share. This has been revised upward 7.3% in the past 60 days. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for IT’s first-quarter 2023 earnings is pegged at $2.04, which has been revised 3% upward in the past 60 days. The consensus estimate for the full year stands at $9.49 per share, which has been revised slightly upward in the past 60 days. The company currently carries a Zacks Rank #2 (Buy).
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