FactSet Research Faces Challenges: Sell Rating Due to ASV Growth Concerns and Market Volatility

Morgan Stanley analyst Toni Kaplan maintained a Sell rating on Factset Research (FDS – Research Report) today and set a price target of $390.00.

Toni Kaplan has given his Sell rating due to a combination of factors affecting FactSet Research’s performance. The anticipated growth in Annual Subscription Value (ASV) is expected to fall short of market expectations, leading to a potential downgrade in ASV guidance. This metric is crucial as it serves as a forward-looking indicator of growth, and the company is likely to miss consensus estimates for net new ASV in the upcoming quarter.
Moreover, the end market conditions remain challenging, with sluggish capital markets and extended sales cycles due to recent volatility. The environment has deteriorated compared to three months ago, with deals being delayed and capital markets recovery still pending. Given these circumstances, Kaplan expects continued deceleration in ASV growth, prompting a reduction in the full-year net new ASV estimate for FY25. Consequently, the Sell rating is maintained with a price target of $390, suggesting a potential downside of 15%.

In another report released today, Barclays also maintained a Sell rating on the stock with a $390.00 price target.

Based on the recent corporate insider activity of 75 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of FDS in relation to earlier this year.