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On Monday, RBC Capital Markets reiterated their Sector Perform rating for FactSet Research Systems (NYSE:FDS), maintaining a price target of $503.00. Currently trading at $446.09, the stock sits between analyst targets ranging from $390 to $536, according to InvestingPro data. The company maintains a strong "GOOD" Financial Health score of 2.69 out of 5. The firm’s analyst, Ashish Sabadra, emphasized the company’s focus on Annual Subscription Value (ASV) growth, attributing it to pricing strategies, new wins, and a strong pipeline. Sabadra’s analysis predicts an organic ASV increase in the low-to-mid $30 million range for the second quarter of 2025, primarily driven by pricing increases in North America that are expected to be in the low-to-mid $20 million range, compared to $25 million in the same quarter the previous year. This growth strategy builds on FactSet’s solid revenue performance, with a 5.02% year-over-year increase and an impressive five-year revenue CAGR of 9%.
The UBS Wealth management deal, which is anticipated to contribute high-single-digit millions to the ASV, and an estimated $18 million from the LiquidityBook acquisition, are also contributing factors to the projected growth. RBC expects FactSet to reaffirm its fiscal year 2025 guidance and to bolster confidence in an acceleration of growth by the fourth quarter of 2025.
Despite the positive outlook on ASV growth, there are investor concerns regarding potentially weaker-than-expected banking hiring and IT spending by banks and asset managers, which may be influenced by macroeconomic and political uncertainties. Moreover, FactSet anticipates its first-half 2025 margins to align with the midpoint of its FY25 margin guidance. Consequently, RBC’s margin estimates for the second quarter of 2025 are positioned below the consensus.
FactSet Research Systems, a global provider of integrated financial information and analytical applications to the investment community, continues to navigate the challenges and opportunities presented by the current economic landscape. RBC’s insights provide a snapshot of FactSet’s performance and potential as the company moves through the 2025 fiscal year. With a market capitalization of $17 billion and an impressive track record of 26 consecutive years of dividend increases, FactSet demonstrates strong fundamentals. For deeper insights into FactSet’s valuation and growth prospects, including exclusive ProTips and comprehensive financial analysis, visit InvestingPro, where you’ll find detailed research reports and advanced analytical tools.
In other recent news, FactSet Research Systems has acquired LiquidityBook for $246.5 million, aiming to enhance its trade workflow solutions. This acquisition is expected to modestly dilute FactSet’s fiscal 2025 earnings per share. FactSet was also recently added to the S&P 500 Dividend Aristocrats index, recognizing its history of dividend increases. In analyst updates, BMO Capital Markets lowered its price target for FactSet from $518 to $498, maintaining a Market Perform rating, following the company’s first-quarter fiscal year 2025 results. These results showed an adjusted earnings per share that exceeded expectations due to cost-saving measures. Meanwhile, Stifel raised its price target for FactSet to $493, citing positive developments and cautious optimism among clients. Despite variability in client purchasing trends, BMO noted FactSet’s guidance aligns with the higher end of consensus estimates for fiscal year 2025. FactSet’s ongoing performance and strategic moves continue to capture the attention of investors and analysts alike.
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