Broadridge Financials' Unstoppable Success: Analyst Initiates Outperform, Hails Competitive Advantage

  • RBC Capital Markets analyst Daniel R. Perlin initiates Broadridge Financial Solutions Inc BR coverage at Outperform at a price target of $169.
  • Perlin believes BR's Investor Communications segment to offer a competitive advantage, as it derives around 47% of recurring revenue from regulatory communications. 
  • The analyst is bullish on the company, given its strong track record of consistently delivering recurring (CC) revenue growth in mid-to-high single-digits, adjusted operating margin expansion of over 50bps and double-digit growth in adj. EPS, since FY14. 
  • Given the diminishing impact of the heavy build of the UBS platform on BR, the analyst expects FCF conversion to improve to around 70% in FY23 and over 85% in FY24. 
  • Consequently, Perlin expects BR's above-market shareholder returns, with a dividend CAGR of around 13% from FY15-FY22, to continue. 
  • The analyst expects total revenues of $6.08 billion, adjusted EBITDA of $1.25 billion and adjusted EPS of $6.89 in 2023.
  • He projects revenues of $6.45 billion, adjusted EBITDA of $1.35 billion and adj. EPS of $7.58 in 2024.
  • For 2025, Perlin anticipates revenue of $6.84 billion, adjusted EBITDA of $1.46 billion and adj. EPS of $8.37.
  • Price Action: BR shares are trading higher by 0.39% at $144.26 on last check Monday.
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