Broadridge Financial Solutions: Assessing Valuation After Northern Trust Expands Global Asset Recovery Partnership

Northern Trust is expanding its global asset recovery capabilities by tapping into Broadridge Financial Solutions (BR)'s proprietary class action technology. This collaboration now covers more than 35 markets, including new support for "opt-in" markets.

See our latest analysis for Broadridge Financial Solutions.

This partnership adds to a year where Broadridge Financial Solutions’ momentum has been reflected in a steady long-term climb, with a 1-year total shareholder return of 6.1% and an eye-catching 70.9% over three years. While the share price cooled recently, closing at $228.99, investors seem to be rewarding the company’s growing reputation for innovation and operational leadership in asset servicing.

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With Broadridge’s strong financials and a current price more than 20% below the average analyst target, is the market overlooking its growth story, or has future upside already been factored in?

Most Popular Narrative: 18% Undervalued

Compared to the last close price of $228.99, the most closely followed narrative sees Broadridge Financial Solutions as trading well below its consensus value. Market optimism centers on digital momentum and earnings resilience. The stage is set for a forward-looking discussion on the company’s growth blueprint and the factors potentially fueling this optimism.

The continued shift toward digitization of financial services, evidenced by Broadridge's growing double-digit digital revenue and rapid increases in digitization rates for regulatory communications (now over 90% for equity proxies), positions the company to benefit from rising demand for digital investor communications and lower-cost delivery. This supports long-term recurring revenue growth and potential future margin expansion.

Read the complete narrative.

Curious what powers this strong fair value target? The narrative leans on digital expansion, sticky recurring revenue, and bold projections for margins and earnings. What hidden assumptions help the analysts reach such a compelling number? Click through for the detailed story behind the estimates.

Result: Fair Value of $279.13 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, event-driven revenues may soften in the near term, and prolonged sales cycles in key segments could present challenges to Broadridge’s expected growth trajectory.

Find out about the key risks to this Broadridge Financial Solutions narrative.

Another View: What Do Market Ratios Say?

From a multiples perspective, Broadridge Financial Solutions trades at a price-to-earnings ratio of 31.8x, which is notably higher than both its industry peers at 19.9x and the broader US Professional Services sector average of 24.9x. The fair ratio suggests a level closer to 29x. This indicates Broadridge commands a premium but may also face valuation risk if market expectations shift. Does the company's innovation and stability justify paying above the sector, or is there downside if growth slows?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Broadridge Financial Solutions Narrative

If you have your own take or want to explore the numbers firsthand, you can shape your own perspective in just a few minutes. Do it your way

A great starting point for your Broadridge Financial Solutions research is our analysis highlighting 5 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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