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On Tuesday, BofA Securities updated its outlook on Autodesk (NASDAQ:ADSK), a software company known for its architecture, engineering, and construction (AEC) solutions. Analyst Michael Funk at BofA Securities increased the price target on Autodesk shares to $335 from the previous $325, while maintaining a Neutral rating on the stock. The company’s shares currently trade at $306.23, near their 52-week high of $326.62. According to InvestingPro analysis, the stock appears slightly undervalued based on their proprietary Fair Value model.
The AEC segment is a significant part of Autodesk’s business, contributing 48% of its revenue. This segment has been a major growth driver for the company, accounting for more than half of the incremental revenue since fiscal year 2023. Autodesk’s AEC segment has propelled about 6.5 percentage points of the company’s 11.5 percentage points in trailing twelve-month growth. The company maintains impressive gross profit margins of 92%, reflecting strong operational efficiency. InvestingPro subscribers can access 12 additional key tips about Autodesk’s financial performance and valuation metrics.
According to Funk, the performance of Autodesk’s AEC segment will likely be the most significant factor influencing the company’s fundamentals in the near to medium term. The segment’s success is attributed to Autodesk’s strong market position, competitive advantages, and the growth of the market itself, along with the company’s growth. This assessment is supported by Autodesk’s overall financial health score of "GOOD" from InvestingPro, which evaluates multiple aspects including profitability, growth, and cash flow metrics.
BofA Securities has initiated the first part of their Autodesk ABCs series, focusing on the AEC segment. In this series, they aim to provide insights into Autodesk’s key benefits, market share, and competitive edge within the AEC market. They also plan to discuss the drivers behind the growth of both the market and the company, as well as the key products and use cases that Autodesk offers.
The report by BofA Securities sheds light on the importance of Autodesk’s AEC segment to its overall performance, suggesting that potential investors and stakeholders should closely monitor this area of the company’s operations.
In other recent news, Autodesk has reported an 11% year-over-year increase in its quarterly earnings, surpassing estimates with Non-GAAP earnings per share of $2.17. The company’s new transaction model is anticipated to add about $270 million to billings. Autodesk also announced the immediate appointment of John Cahill and Ram Krishnan as new independent directors to its Board of Directors. This change follows a meticulous search by the Corporate Governance and Nominating Committee.
Several analyst firms have adjusted their outlooks on Autodesk. Macquarie initiated coverage with an Outperform rating and a price target of $380. Citi reiterated its Buy rating, maintaining a price target of $361.00, while JPMorgan increased its stock price target to $300, maintaining a Neutral rating.
In other company news, Autodesk appointed Janesh Moorjani as the new Chief Financial Officer, effective from December 16. The company aims to maintain a 10-15% growth framework over the long term and is preparing for strong free cash flow growth in fiscal 2026. These are among the recent developments for Autodesk.
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