Why RBC Analysts Are Bullish On FactSet: What Investors Should Know

Strong demand and competitive positioning have turned RBC Capital Markets analysts Bullish on shares of FactSet Research Systems, Inc. FDS.

The FactSet Analyst: RBC's Ashish Sabadra initiated coverage of FactSet Research Systems, Inc. with an Outperform rating, setting a price target of $375.

The FactSet Takeaways: Strong demand due to economic recovery and digital transformations has resulted in a solid deal pipeline, said Sabarda in a Wednesday note.

Existing client wallet share gains, high retention rates and price increases contribute to solid annual subscription value (ASV) growth, said the analyst.

Drivers of growth by FactSet’s solution offerings, according to the note, include: the introduction of the Advisor Dashboard; front-office solutions and performance and risk APIs for analytics solutions (the most significant driver of ASV growth); and robust capital markets activity for content and technology solutions (CTS).

FactSet’s CTS offers a plethora of data in several industry-specific verticals that are highly sought after, according to the note.

The company has also aggregated much data on funds, private companies and recently added ESG information through its Truvalue Labs acquisition, furthering its competitive positioning, says Sabarda.

The company’s technology investments have also improved content distribution and enhanced product offerings through APIs, cloud migration, and even partnerships with cloud data platforms such as Snowflake Inc SNOW, the analyst said.

The $375 price target is based on a 30x P/E multiple on expected CY22 earnings, which is in line with information services peers, said Sabarda.

FDS Price Action: Shares of FactSet Research Systems were up 0.66% to $341.96 Thursday at publication.