FactSet Research Systems (NYSE:FDS) stock rose about 15.1% on Thursday following its results for the third quarter of fiscal 2020, which ended May 31. The company reported mixed results in the third quarter. Although the earnings beat analysts’ expectations, the sales were below the estimates.
FactSet’s Q3 earnings results
In the third quarter, FactSet reported an adjusted EPS of $2.86 compared to $2.62 in the third quarter of fiscal 2019. The adjusted earnings beat analysts’ consensus estimate of $2.43 per share. FactSet generated sales of $374.1 million—a growth of 2.6% from the third quarter of fiscal 2019. The company missed analysts’ consensus sales estimate of $376.0 million.
In the third-quarter earnings release, FactSet CEO Phil Snow said, “We had a strong third quarter and executed well in challenging circumstances.” He also said, “I am inspired by the efforts I see across the Company as FactSetters go above and beyond to support our clients and each other. The steps we have taken position us well to finish our fiscal year on target as we continue to evaluate and solve for evolving industry needs.”
Financial outlook for FactSet
For fiscal 2020, FactSet expects its adjusted EPS to be between $10.40 and $10.60. The company also expects to generate sales between $1.485 billion and $1.490 billion in fiscal 2020.
Wall Street analysts expect FactSet to post an adjusted EPS of $2.49 on revenue of $378.4 million in the fourth quarter. Analysts also expect FactSet’s revenues to increase by 3.8% YoY (year-over-year) in fiscal 2020 to $1.49 billion. The sales could rise by 4.2% YoY in fiscal 2021 to $1.55 billion. The adjusted earnings will likely increase by 2.8% YoY in fiscal 2020 to $10.28 per share. However, the profits could rise by 4.3% YoY to $10.72 per share in fiscal 2021.
Among the 16 analysts following FactSet stock, nine recommend a “hold,” six recommend a “sell,” and one recommends a “strong sell.” None of the analysts recommend a “buy.” Wall Street analysts have a 12-month target price of $277.54 for FactSet stock. Overall, the target price indicates a downside potential of 18.9% compared to the stock’s closing price on Thursday. The consensus target price for the stock has risen from $231.67 in May—a growth of 19.8%.
Many analysts changed their target price for FactSet stock after its third-quarter results.
- Credit Suisse increased its target price from $250 to $310.
- Jefferies increased its target price from $268 to $308.
- Stifel increased its target price from $230 to $310.
- Wells Fargo increased its target price from $250 to $280.
FactSet stock rose 15.1% on Thursday and ended the day at $342.16. At this closing price, the company’s market cap is $13.0 billion. Notably, the stock is trading 0.5% below its 52-week high of $343.78 and 75.3% above its 52-week low of $195.22. So far, the stock has risen by around 27.5% year-to-date.
Based on the closing price on Thursday, FactSet stock was trading 12.0% above its 20-day moving average of $305.39. The stock is also trading 17.7% above its 50-day moving average of $290.77 and 22.0% above its 100-day moving average of $280.38. FactSet’s 14-day relative strength index score of 70.2 indicates that it’s overbought.
On Thursday, the Dow Jones Industrial Average rose by 300 points or 1.18%. Meanwhile, the S&P 500 and the Nasdaq Composite gained about 1.10% and 1.09%, respectively. To learn more, read Strategist Thinks S&P 500 Volatility Could Rise.