Looking at Broadridge Financial Solutions, Inc.'s (NYSE:BR) earnings update on 30 June 2019, it seems that analyst expectations are fairly bearish, with profits predicted to rise by 8.5% next year compared with the higher past 5-year average growth rate of 14%. With trailing-twelve-month net income at current levels of US$482m, we should see this rise to US$523m in 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Broadridge Financial Solutions in the longer term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
How is Broadridge Financial Solutions going to perform in the near future?
The view from 8 analysts over the next three years is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
From the current net income level of US$482m and the final forecast of US$646m by 2022, the annual rate of growth for BR’s earnings is 9.4%. This leads to an EPS of $5.63 in the final year of projections relative to the current EPS of $4.16. With a current profit margin of 11%, this movement will result in a margin of 13% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Broadridge Financial Solutions, I've put together three fundamental aspects you should further research:
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Valuation: What is Broadridge Financial Solutions worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Broadridge Financial Solutions is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Broadridge Financial Solutions? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.