Investment research firm DA Davidson has lowered its price target for Broadridge Financial Solutions Inc. (NYSE:BR) to $228, down from its previous target of $240, while keeping its Neutral rating intact. The adjusted target still lies above the current stock price of $205.27, with shares trading close to their 52-week low of $204.93. Data from InvestingPro suggests the stock may be undervalued when assessed against its fair value.
The revision comes amid noted compression in average multiples among peers within the financial services sector. DA Davidson also updated its financial outlook, modestly dialing down second-quarter forecasts especially for event-driven proxy distribution volumes and overall distribution revenue. These tweaks align with the cautious stance reflected in the updated price target.
For the fiscal second quarter of 2026, the research firm anticipates Broadridge to have recorded a 1% increase in total revenue year-over-year, reaching $1.60 billion. This is marginally below the consensus expectation of $1.61 billion. The firm projects recurring fee revenue to have expanded by 7% year-on-year, coming in at approximately $1.05 billion, which would constitute 66% of the total revenues. This forecast follows Broadridge's reported revenue growth of 8.57% over the prior twelve months, with annual total revenue hitting $7.06 billion. Based on InvestingPro's data, Broadridge currently trades at a price-to-earnings ratio of 26.29 alongside a favorable price/earnings-to-growth (PEG) ratio of 0.75.
The firm estimates non-recurring revenues declined around 10% year-over-year, projecting $0.55 billion for this segment in the quarter. It also lowered the fiscal second-quarter adjusted earnings per share (EPS) forecast by two cents to $1.35, slightly beneath the consensus forecast of $1.36.
Looking ahead, DA Davidson expects Broadridge’s management to affirm or slightly adjust the company’s fiscal year 2026 guidance when the upcoming quarterly results are announced on February 3, just days away. Despite fine-tuning, the firm notes that the revisions to its annual outlook for Broadridge are not substantial.
Investors may find some stability in the company’s continuous dividend growth, with a streak of 19 consecutive years of dividend increases and a current yield near 1.86%. For those seeking a deeper dive, a comprehensive Pro Research report detailing Broadridge’s fundamentals and strategic positioning is accessible through InvestingPro.
Complementing these developments, Broadridge Financial Solutions reported strong fiscal first-quarter performance, with earnings per share of $1.51 surpassing estimates of $1.24. Revenue also exceeded forecasts, reaching $1.59 billion and representing a 3.25% increase over expectations. The company completed its acquisition of Acolin, a Zurich-headquartered firm specializing in cross-border fund distribution and regulatory services. This acquisition bolsters Broadridge’s capabilities within asset management solutions.
Amid these results, DA Davidson held its Neutral rating and adjusted its price target slightly, citing the firm's solid quarterly outcomes and increased contributions from higher-margin revenue streams. Separately, Morgan Stanley revised its price target on Broadridge from $261 down to $256 while maintaining an Equalweight rating and updating financial models to incorporate estimates through 2027. These analyst activities reflect nuanced investor perspectives on Broadridge’s financial stability and strategic initiatives.