Broadridge Financial Solutions Set to Reveal Q2 Earnings Amidst Mixed Market Performance
Lake Success, New York’s Broadridge Financial Solutions, Inc. (BR) specializes in investor communications and technology solutions tailored for the financial services sector. With a market capitalization of $26.9 billion, the company operates through its Investor Communication Solutions (ICS), Global Technology and Operations (GTO) segments, among others.
Upcoming Earnings Report Sparks Anticipation
Broadridge Financial is about to announce its second-quarter results before the market opens on Friday, January 31. Analysts predict that BR will report a non-GAAP profit of $1.39 per share, marking a remarkable increase of 51.1% from $0.92 per share reported during the same quarter last year. In a positive trend, the company has met or exceeded earnings expectations set by analysts in each of the last four quarters. Last quarter, its adjusted earnings per share (EPS) decreased 8.3% from the previous year to $1.00, yet it aligned with Wall Street forecasts.
Strong Earnings Forecasts for Fiscal Years Ahead
Looking ahead to fiscal 2025, Broadridge is projected to achieve an adjusted EPS of $8.53, a 10.4% rise from $7.73 in fiscal 2024. The company’s growth is expected to continue into fiscal 2026, with an anticipated earnings increase of 9.5% year-over-year, reaching $9.34 per share.
Stock Performance Compared to Market Trends
Over the last year, BR stock has increased by 14.1%, but this performance lags behind the S&P 500 Index’s ($SPX) impressive rise of 26.5% and the Technology Select Sector SPDR Fund’s (XLK) 22.1% returns in the same period.
Recent Growth in Recurring Revenue
After the release of its Q1 results on November 5, Broadridge’s stock soared by 4.1%. This growth can be attributed to a rise in recurring revenue driven by new business in ICS and internal expansion within the GTO segment, resulting in a 3% year-over-year increase to $900 million. Observing this positive trend, the company has upgraded its full-year constant currency recurring revenue growth forecast from 5% – 7% to a new range of 6% – 8%.
Despite these gains, Broadridge faced challenges due to reduced activity in corporate actions and a decline in mutual fund proxy communications. Consequently, its event-driven and distribution revenues were adversely affected, causing overall revenues to dip by 57 basis points to $1.4 billion. Increased expenses also played a role in net earnings dropping 12.2% year-over-year to $79.8 million.
Analysts’ Perspectives on Broadridge’s Outlook
The consensus among analysts is cautious regarding the future of BR stock. It currently holds an overall “Hold” rating. Of the seven analysts monitoring the company, two advocate a “Moderate Buy” while five recommend a “Hold.” The average price target for Broadridge stands at $231.17, suggesting only a slight upside from the current trading price.
On the date of publication, Aditya Sarawgi did not hold (either directly or through indirect means) any positions in the securities mentioned in this article. The information and data presented are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily represent the views of Nasdaq, Inc.
