Yahoo Finance Here's What Analysts Are Forecasting For Broadridge Financial Solutions, Inc. (NYSE:BR) After Its Third-Quarter Results
It's been a good week for Broadridge Financial Solutions, Inc. (NYSE:BR) shareholders, because the company has just released its latest third-quarter results, and the shares gained 3.4% to US$119. Revenues of US$1.3b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$1.43, missing estimates by 4.4%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
View our latest analysis for Broadridge Financial Solutions
Taking into account the latest results, the most recent consensus for Broadridge Financial Solutions from nine analysts is for revenues of US$4.66b in 2021 which, if met, would be a modest 6.4% increase on its sales over the past 12 months. Per-share earnings are expected to leap 26% to US$4.57. Before this earnings report, the analysts had been forecasting revenues of US$4.72b and earnings per share (EPS) of US$4.69 in 2021. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.
The consensus price target held steady at US$127, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Broadridge Financial Solutions analyst has a price target of US$140 per share, while the most pessimistic values it at US$115. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Broadridge Financial Solutions' revenue growth will slow down substantially, with revenues next year expected to grow 6.4%, compared to a historical growth rate of 11% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 11% next year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Broadridge Financial Solutions.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Broadridge Financial Solutions analysts - going out to 2024, and you can see them free on our platform here.
We don't want to rain on the parade too much, but we did also find 2 warning signs for Broadridge Financial Solutions that you need to be mindful of.
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