Raymond James lifted its rating on FactSet from Underperform to Market Perform following encouraging signs of a turnaround in growth and profitability. The recent quarter showed renewed momentum, with ASV growth between 4.5% and 5.1% and organic revenue climbing about 5%. This shift in trajectory has helped ease prior concerns around stagnating fundamentals.
🧮 Valuation Realignment: The stock’s valuation has pulled back to 24–31x forward P/E, much more in line with its historical averages and the broader market, reducing downside risk.
📊 Reliable Revenue Base: Nearly all of FactSet’s revenue is recurring, with client retention holding firm near 95%, reflecting the embedded value its financial data services provide.
💻 Capex Cooling: Heavy investment in generative AI and product development is tapering, easing margin pressure and setting the stage for improved earnings leverage in FY26.
🚨 Risks Still Present: Spending caution among asset managers and rising competition from platforms like Refinitiv may cap further upside, prompting a neutral stance.
Dividend Fundamentals
FactSet remains a solid income play for long-term investors. It recently raised its quarterly dividend from $1.04 to $1.10 per share, yielding approximately 1.01%. The payout ratio remains conservative at about 31%, supporting future dividend growth. With 27 consecutive years of dividend increases, FactSet continues to reward patient shareholders.