Broadridge Financial Soln (BR:NYS) Fundamental Valuation Report

Fundamental Valuation Report

Broadridge Financial Soln(BR:NYS)

Industrials:Business Services

This Report was generated using the valuation tools available on StockCalc.com. For a free 30 day trial click here.

Close Price/Date
$106.24 (USD) 12/11/2018

Weighted Valuation
$110.31 (USD)

Overall Rating
Fairly valued to slightly Undervalued by 3.8%

Valuation Models Analyst Consensus: $123.00 (USD)
(in order of importance) Discounted Cash Flow: $104.32 (USD)
Adjusted Book Value: $84.18 (USD)
Valuation Methods This company is:
Cash Flow: Fairly valued on a Cash Flow Valuation
Comparable Company: Overvalued on a Comparable Valuation
Asset: Overvalued on an Asset Valuation

Company Overview (BR:NYS USD)

Price 106.24
Range 106.02 – 108.75
52 week 88.56 – 137.72
Open 107.16
Vol / Avg. 1.14M/1.07M
Mkt cap 12.4B
P/E 28.11
Div/yield 1.46/0.01
EPS 3.56
Shares 116.75M
Beta 0.95

Company Description

Broadridge Financial Solutions Inc is a provider of investor communication and securities processing solutions to the financial industry. The company operates two business segments: Investor Communications Solutions, and Global Technology and Operations. The larger segment, investor communication solutions, offers investor and customer communication solutions, corporate issuer and advisor solutions, and mutual fund and retirement solutions. The primary business is the processing and distribution of proxy material to investors in equity securities and mutual funds and the facilitation of related vote processing. Broadridge’s largest end market is the United States of America.

Valuation Details

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for BR:NYS

Using a discounted cash flow model we generated an intrinsic value of $104.32 (USD) for BR:NYS

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

BR:NYS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $104.32 1% 5% 1% 5%
WACC (or Ke) 7.77 $133.17 $85.15
Terminal Growth Rate 2.80 $86.89 $130.54
Tax Rate 0.24 $111.54 $97.10
Cash Flow 914,500,292 $98.82 $109.83
Capital Expenditures 0 $104.32 $104.32
Long Term Debt 1,125,800,000 $104.81 $103.84

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $63.63 (USD) for BR:NYS. We also generated a valuation of $53.59 (USD) using other metrics and comparables.
The comparable companies were CoreLogic (CLGX:NYS), Equifax (EFX:NYS), First Data (FDC:NYS), Jack Henry & Associates (JKHY:NAS) and Synnex (SNX:NYS).

Company BR:NYS End Date Value
Earnings/Share $3.78 (USD)
Book Value/Share $9.37 (USD)
Sales/Share $35.96 (USD)
Cash Flow/Share $5.76 (USD)
EBITDA/Share $6.37 (USD)
Price Based on Comps Adjustment Factor (%)
$74.84 (USD) -40.2
$41.60 (USD) -1.1
$107.16 (USD) -17.3
$79.73 (USD) -16.3
$85.32 (USD) -9.2
BR:NYS Ratios Used Average Values CLGX:NYS EFX:NYS FDC:NYS JKHY:NAS SNX:NYS
32.85 PE Ratio 19.80 19.44 27.57 9.92 30.89 11.18
12.48 PB Ratio 4.44 3.18 3.84 4.32 9.14 1.71
3.25 PS Ratio 2.98 1.83 3.61 1.74 7.57 0.16
20.30 PCF Ratio 15.36 9.25 17.23 7.86 28.21 14.25
18.83 EV to EBITDA 13.39 10.92 16.01 10.98 21.19 7.86

Multiples

Using a multiples approach we generated a valuation of  $93.75 (USD) for BR:NYS

Company BR:NYS End Date Value
Earnings/Share $3.78 (USD)
Book Value/Share $9.37 (USD)
Sales/Share $35.96 (USD)
Cash Flow/Share $5.76 (USD)
EBITDA/Share $6.37 (USD)
Price Based on Comps Adjustment Factor
$101.50 (USD) 0
$74.56 (USD) 0
$91.74 (USD) 0
$109.18 (USD) 0
$91.76 (USD) 0
Ratios Ratio Average
PE Ratio 26.85
PB Ratio 7.95
PS Ratio 2.55
PCF Ratio 18.95
EV to EBITDA 14.40

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  BR:NYS for the last 10 years was  7.93

We ran the Adjusted Book Value for  BR:NYS and generated a book value of  $10.61 (USD)
By multiplying these we get an adjusted valuation of  $84.18 (USD)

Analyst Data

In the Stockcalc database there are 2 analysts that provide a valuation for BR:NYS. The 2 analysts have a concensus valuation for BR:NYS for 2019 of $123.00 (USD).

BR:NYS Broadridge Financial Soln

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
1 1 0 4.0000 Outperform 2018-11-9

Current Price: 106.24 USD

Analyst Consensus
USD Millions 2019 2020
Mean EPS 4.66 5.08
# EPS Analysts 1 1
Mean Revenue 4,456.80 4,643.90
# Revenue Analysts 1 1
Mean Target Price 123.00
Mean Cash Flow
Mean EBITDA
Mean Net Income
Mean Debt Outstanding
Mean Tax Rate 19.10 20.00
Mean Growth Rate 10.00
Mean Capital Expenditure

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.

The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).

The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.

With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.

If we have Analyst coverage for the company we use the consensus target price here.

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