Autodesk named a ‘Top Pick’ at Morgan Stanley

Following Autodesk management setting a goal of achieving “among the best GAAP margins” in the industry, Morgan Stanley analyst Elizabeth Porter did a deep dive on Autodesk’s margin opportunity, which suggests margins could rise to 29% in FY28 from the current 22% and increases the firm’s conviction in upside to EPS estimates. Autodesk shares are trading at a multi-turn discount to both design software and scaled software peers, while fundamentals are passing the trough on free cash flow, revenue growth, operating margin and investor sentiment, notes the analyst, which sees a favorable risk/reward with an opportunity for both EPS and multiple expansion, leading it to name Autodesk as the analyst’s “Top Pick.” Morgan Stanley has an Overweight rating and $320 price target on Autodesk shares.