Broadridge Financial Poised For Revenue Recovery, Raymond James Says In Upgrade


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Broadridge Financial Solutions, Inc. (NYSE:BR) could return to the organic recurring revenue growth rate of 5-7 percent targeted by the company on the back of a reacceleration in revenue growth in its Global Technology & Operations — GTO — segment over the next few quarters, according to Raymond James.

The Analyst

Raymond James’ Patrick O'Shaughnessy upgraded Broadridge from Market Perform to Outperform and set a $118 price target. 

The Thesis

The shareholder communications services company, founded as a spin-off from Automatic Data Processing (NASDAQ:ADP), has been witnessing meaningful pressure on its revenue growth, O'Shaughnessy said in the Wednesday upgrade note. 

The analyst said he expects revenue growth to decline from the 9 percent achieved in fiscal 2018 to 4 percent in fiscal 2019. 

Broadridge’s solid closed-sales activity and growing backlog of larger deals should convert into revenue going ahead, boosting growth back to 7 percent in fiscal 2020, in Raymond James' view. 

The company has indicated that a large global post-trade processing contract with a major bank could begin in the fourth quarter, O'Shaughnessy said. Broadridge has also won several contracts from Asian and European banks in post-trade processing, corporate actions and other newer solutions, he said. 

“We believe Broadridge’s current valuation offers investors an attractive entry point into a differentiated, high barrier-to-entry business." 

Price Action

Broadridge Financial shares were up 3.61 percent at $104.07 at the time of publication Wednesday. 

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27% profits every 20 days?

This is what Nic Chahine averages with his options buys. Not selling covered calls or spreads... BUYING options. Most traders don't even have a winning percentage of 27% buying options. He has an 83% win rate. Here's how he does it.


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Posted In: Analyst ColorUpgradesPrice TargetAnalyst RatingsPatrick O'ShaughnessyRaymond James