Cautious Outlook on FactSet Research Due to Slowing ASV Growth and Unchanged Margin Guidance

Morgan Stanley analyst Toni Kaplan has maintained their bearish stance on FDS stock, giving a Sell rating today.

Toni Kaplan’s rating is based on several factors, including the continued slowdown in FactSet Research’s organic Annual Subscription Value (ASV) growth, which was below both Morgan Stanley’s and consensus estimates. Despite a significant win in wealth management, the net new ASV for the quarter was only $20 million, falling short of expectations. The company’s management remains optimistic about an inflection in ASV growth later in the year, but the current deceleration in both buy-side and sell-side ASV raises concerns.
Additionally, while the adjusted operating income margin exceeded expectations, the anticipated dilution from acquisitions and increased investments in the second half of the year led to unchanged guidance for adjusted operating margins. Consequently, Toni Kaplan has lowered the price target to $390 from $409, reflecting a cautious outlook on the company’s ability to achieve sustained improvement in its financial performance.

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

FDS’s price has also changed slightly for the past six months – from $465.910 to $430.930, which is a -7.51% drop .