Citi cuts Autodesk stock price target to $339, maintains Buy rating

On Thursday, Citi analyst Tyler Radke adjusted the price target for Autodesk stock, traded on (NASDAQ:ADSK), to $339 from the previous $361 while reaffirming a Buy rating on the shares. According to InvestingPro data, the stock, currently trading at $285.67, appears fairly valued based on its proprietary Fair Value model, with analyst targets ranging from $275 to $430. The revision follows insights from the latest reseller survey, which suggested a downtrend in growth and sales targets achievement compared to past surveys. Radke noted the perceived negativity is likely a result of changes in the transaction model, particularly as discounting at resellers tightens with a shift toward value-added services. This aligns with observations from a recent business tour and Non-Deal Roadshow (NDR) in Los Angeles, which indicated Autodesk’s business trends remain stable. InvestingPro analysis reveals impressive fundamentals, including a 91.98% gross profit margin and stable revenue growth of 11.5% over the last twelve months.

Radke’s report includes a mix of leading economic indicators, with the Architecture Billings Index (ABI) showing contraction, contrasting with a robust 27% year-over-year increase in the Demand Management Index (DMI), supported by strength in data centers. For the fourth quarter, Citi’s estimates are on the higher end of Autodesk’s guidance, with market expectations leaning towards a slight surpassing of targets. Initial forecasts for fiscal year 2026 suggest a growth in revenue and billings by 13% and 18%, respectively.

The analyst reaffirmed confidence in Autodesk’s prospects, citing specific tailwinds that are anticipated to boost growth and widen profit margins over the medium term. While Citi’s estimates for Autodesk remain largely unchanged, a revised regression analysis led to the new price target of $339. Radke concluded by reiterating the Buy rating, signaling continued optimism for the software company’s performance moving forward. For deeper insights into Autodesk’s valuation and growth prospects, InvestingPro subscribers can access comprehensive financial health scores and 13 additional ProTips in the detailed Pro Research Report.

In other recent news, Autodesk has been the focus of several analyst updates and industry insights. KeyBanc Capital Markets maintained an Overweight rating for Autodesk with a $330 price target, anticipating a standard fourth-quarter performance and highlighting the appointment of Janesh Moorjani as the new CFO. Morgan Stanley (NYSE:MS) also reiterated its Overweight rating with a higher price target of $375, noting stable revenue and margin expansion as key factors. Meanwhile, Baird increased its price target to $345, citing positive feedback from Autodesk partners, though it warned that initial guidance might appear conservative.

BofA Securities raised its price target to $335, maintaining a Neutral rating, and emphasized the importance of Autodesk’s Architecture, Engineering, and Construction (AEC) segment, which significantly contributes to the company’s revenue. The AEC segment accounts for a substantial portion of Autodesk’s growth, and its performance is crucial for the company’s near to medium-term fundamentals. Additionally, the American Institute of Architects reported a decline in the US Architecture Billings Index, which could potentially impact Autodesk, given its reliance on the architecture industry for software sales.

Rosenblatt analyst Blair Abernethy highlighted the index’s drop as a signal of reduced activity levels in the architecture sector, which may influence Autodesk’s future earnings. Despite these mixed signals, analysts remain optimistic about Autodesk’s potential for growth, with upcoming earnings reports anticipated to provide further clarity on the company’s financial trajectory. Investors are advised to monitor these developments closely, as they could affect Autodesk’s market position and future performance.

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