Back to top

Image: Bigstock

Broadridge Financial (BR) Q2 Earnings: What's in Store?

Read MoreHide Full Article

Broadridge Financial Solutions Inc. (BR - Free Report) is set to report fiscal second-quarter 2017 results on Feb 8. Last quarter, the company posted a negative earnings surprise of 5.26%. Let us see how things are shaping up for this announcement.

Factors at Play

Broadridge reported mixed first-quarter results, wherein the bottom line missed the Zacks Consensus Estimate but the top line surpassed the same. Year-over-year comparisons on both the counts were favorable driven by higher recurring revenues, contribution from Net New Business, higher distribution revenues and acquisition-related synergies.

We remain optimistic about Broadridge’s strategic acquisitions, product launches, share repurchase program and dividend paying initiatives. We also believe that the company’s close association with Accenture (ACN - Free Report) will be beneficial over the long term.

However, competition from DST Systems Inc. and pricing pressure remain headwinds.

Broadridge Financial Solutions, Inc. Price and EPS Surprise

Earnings Whispers

Our proven model does not conclusively show that Broadridge will beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: Earnings ESP for Broadridge is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 38 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Broadridgehas a Zacks Rank #3, which when combined with an ESP of 0.00%, makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are a couple of companies which you may consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter:

CVS Health Corporation (CVS - Free Report) , with an Earnings ESP of +0.60% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Moody's Corporation (MCO - Free Report) , with an Earnings ESP of +0.89% and a Zacks Rank #3

Zacks' Top Investment Ideas for Long-Term Profit

How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>

Published in