FDS

FactSet (FDS) is leveraging AI capabilities and model context protocol (MCP) solutions to drive revenue growth, with AI offerings contributing over 10% of new annual subscription value in Q4 fiscal 2026. The company achieved 14% free cash flow growth to $707M and doubled share repurchases. However, FDS faces headwinds from intensifying AI competition, slowing ASV growth moderation to 5-6.5% in fiscal 2027, and margin pressures from infrastructure investments, leading to a Hold rating.

Recent economic data shows PCE inflation came in softer than expected while Q2 GDP exceeded expectations. Market attention is focused on the upcoming Friday employment report. Several companies reported earnings results with mixed stock performance: FactSet Research Systems beat earnings estimates and gained 3.8%, Concentrix outpaced estimates with a modest 0.3% gain, Hewlett Packard Enterprise surged 3.9% following a $1.2 billion deal with Vultr, while Mattel declined 4.2% after announcing a new CEO.

FactSet Research Systems (FDS) delivered Q4 FY2026 results beating expectations with adjusted EPS of $4.52 (up 11.6% YoY) and revenues of $634.7M (up 6.3% YoY). Organic ASV grew 7% to $2.57B with retention above 95%.

The company guided FY2027 revenues of $2.6-$2.63B and adjusted EPS of $19.25-$19.65, though margins contracted due to higher compensation costs. AI solutions ASV more than doubled YoY, reflecting strong adoption.

FactSet Research (FDS) reported quarterly earnings of $4.52 per share, beating consensus estimates of $4.32 and surpassing revenue expectations with $634.7 million. However, the stock has underperformed the S&P 500 by 22.5 percentage points year-to-date. The company received a Zacks Rank #3 (Hold) rating with mixed estimate revisions, suggesting near-term performance in line with the market.

S&P Global reported Q2 2026 adjusted EPS of $4.83, up 23% YoY and beating consensus by 7.6%, with pro-forma revenues rising 11% to $3.68B. The company raised its 2026 share buyback target to over $7B and achieved nearly 60% of its $100M AI-driven cost savings target. However, rising competition, AI-driven shifts in customer demand, and potential pricing pressure in credit ratings and market data could challenge future growth and margins.

The U.S. economy showed mixed signals with rising inflation (3.7% headline, 2.6% core) and geopolitical tensions pressuring markets. The Nasdaq fell 4.1% while the Dow gained 0.29%, reflecting investor preference for blue-chip stocks over tech. Despite market uncertainty, Zacks' research-driven rating systems demonstrated strong performance, with Valero Energy gaining 29.7% post-upgrade, Palantir surging 40.5% over 12 weeks, and the Zacks Rank #1 portfolio outperforming the S&P 500 by 3.9 percentage points year-to-date.

Third-quarter earnings season begins the week of October 12, with S&P 500 companies expected to post 29.5% year-over-year earnings growth—the third consecutive quarter above 25%. Earnings estimates have been revised upward throughout the quarter, and all 11 sectors are projected to show growth, with five sectors (energy, IT, communications, materials, and industrials) expected to post double-digit gains. Strong earnings typically support higher stock prices.

Thomson Reuters' three core businesses—Legal Professionals, Corporates, and Tax, Audit & Accounting—generated 10%, 10%, and 8% organic growth respectively in Q2 2026, representing 83% of total revenues. With the company's overall organic revenue growth at 9% and recurring revenues up 9%, these core segments are becoming increasingly critical to sustaining momentum. However, Reuters and Global Print showed weaker performance at 4% and -3% respectively, making future growth heavily dependent on the Big 3's ability to maintain high-single-digit to double-digit growth as their revenue base expands.

Accenture delivered impressive Q4 fiscal 2026 earnings of $3.29 per share (up 8.6% YoY) and revenues of $18.7B (up 6.2% YoY), both beating consensus estimates. The company projects FY27 local-currency revenue growth of 3-6% with EPS of $14.39-$14.81.

Managed Services bookings led at $12.77B, and the company expanded operating margins to 15.3%. FactSet Research and Paychex also reported strong quarterly results.