Exane downgrades Intuit to Underperform on risks, valuation

Exane BNP Paribas downgraded Intuit (INTU) to Underperform from Neutral with a price target of $530, down from $610. The company’s risks include its over-reliance on price versus seat and unit growth, market expectations for “big earnings beats” of guidance, potential generative artificial intelligence competitive disruption, the need to invest in research and development, a lack of generative AI monetization, and the stock’s “premium valuation,” the analyst tells investors in a research note. Exane says that with H&R Block (HRB) leveraging its Assisted “pedigree,” Block’s (SQ) Cash App looking to cannibalize the segment with free offerings, and the Internal Revenue Service’s Direct File launching in all 50 states this tax season, there is risk that Intuit’s recently lowered consumer growth outlook “is not as de-risked as many investors think.”