Raymond James analyst Patrick O’Shaughnessy has maintained their neutral stance on FDS stock, giving a Hold rating on August 20.
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Patrick O’Shaughnessy has given his Hold rating due to a combination of factors affecting FactSet Research. The company’s recent decline in valuation, which has reached levels not seen in over five years, is a significant consideration. This devaluation is attributed to mediocre sales performance, increased competition on pricing, an unexpected CEO transition, and rising competitive pressure from AI advancements.
Despite these challenges, FactSet possesses several appealing attributes, such as a recurring revenue model, a solid long-term performance history, and low financial leverage, making it an attractive acquisition target. While strategic buyers are not immediately apparent, private equity firms might find the acquisition appealing due to the company’s limited balance sheet leverage. O’Shaughnessy’s analysis suggests that a leveraged buyout could yield an acceptable internal rate of return for private equity, further supporting the Hold rating.
In another report released on August 20, RBC Capital also maintained a Hold rating on the stock with a $395.00 price target.