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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