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Why FactSet Stock Is Higher Today

By Lou Whiteman - Apr 23, 2021 at 3:57PM

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The financial data company is reportedly on an acquirer's radar screen.

What happened

Shares of FactSet Research Systems (FDS 1.53%) jumped as high as 12.9% on Friday on reports that the financial data company has attracted takeover interest.

FDS Chart

FDS vs. S&P 500 data by YCharts.

So what

FactSet, though a bit under the radar, has been a steady performer. The company sells high-priced subscription data services to Wall Street banks and investors, and the stock over the past five years has beaten the S&P 500 by more than 25 percentage points.

It appears potential buyers are bullish on FactSet's future. DealReporter on Friday reported that FactSet is expected to attract takeover interest amid consolidation among financial data and information-services vendors. The report, which quotes unnamed sources, says that at least one major player has FactSet on its radar.

Already in the sector, S&P Global has announced plans to acquire IHS Markit, and London Stock Exchange Group has acquired Refinitiv.

Illustration of financial data.

Image source: Getty Images.

Now what

It is hard to know what to make of takeover rumors and worth noting that even if the rumor is true, it is still a long way from an actual acquisition offer. But Credit Suisse analyst Kevin McVeigh in a note called the rumor "not entirely surprising," lending credence to the report.

FactSet has a loyal customer base and would be a good option for a larger company looking to build market share. It will be interesting to see what, if anything, an acquirer might be willing to pay for those assets.

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Stocks Mentioned

FactSet Research Systems Inc. Stock Quote
FactSet Research Systems Inc.
FDS
$401.85 (1.53%) $6.04

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