Broadridge Financial’s Price Target Raised at Evercore ISI

Evercore ISI analysts increased their price target for Broadridge Financial Solutions (NYSE:BR) from $226.00 to $230.00, while maintaining their Outperform rating. The analysts anticipate that at Broadridge's triennial investor day this Thursday, there is a high likelihood, about 75%, of the company presenting new three-year earnings per share (EPS) growth projections that surpass its December 2020 forecast.

They expect the total recurring revenue growth to maintain its 7-9% rate, but the EPS growth outlook might be raised to 9-13% from the previous range of 8-12%. This potential increase is attributed to enhanced free cash flow following the completion of the UBS wealth platform and the renewal of Broadridge's extensive share repurchase program.

The analysts also suggest that dividend growth tends to follow earnings growth, which is important for dividend-focused investors. For context, at the 2020 investor day, Broadridge forecasted 7-9% total recurring revenue growth, 5-7% organic recurring revenue growth, a 50 basis points annual increase in operating margin, and 8-12% adjusted EPS growth. Moreover, due to the significant impact of Trian’s proxy contest with Disney, the analysts revised their 2024 and 2025 EPS estimates upwards to $7.85 and $8.80, respectively, from the earlier estimates of $7.75 and $8.70.