In a report released yesterday, Jason Haas CFA from Wells Fargo reiterated a Sell rating on Factset Research (FDS – Research Report), with a price target of $405.00.
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Jason Haas CFA has given his Sell rating due to a combination of factors influencing Factset Research’s financial outlook. Despite the company’s strong performance in the third quarter, including an above-consensus ASV and a reaffirmed year-over-year organic ASV growth guidance, there are concerns about declining margins. The anticipated increase in technology-related expenses is expected to impact margins negatively in the fourth quarter, which could pose challenges to the company’s profitability.
Moreover, while Factset is making strategic investments in new solutions like GenAI and has seen positive reception for its Pitch Creator product, these initiatives also contribute to the increased expenses. The company’s plans to ramp up hiring to support these new solutions further add to the cost pressures. Although there is confidence in meeting the fiscal year guidance due to a strong pipeline and reduced cancellations, the combination of these factors leads to a cautious outlook, justifying the Sell rating.
In another report released yesterday, Goldman Sachs also reiterated a Sell rating on the stock with a $422.00 price target.
FDS’s price has also changed moderately for the past six months – from $489.340 to $437.030, which is a -10.69% drop .