FactSet price target lowered to $448 from $470 on inflation concerns

Evercore ISI lowered its price target on FactSet Research Systems (NYSE:FDS) stock to $448 from $470 while maintaining an "In Line" rating ahead of the company’s fiscal third-quarter earnings report. According to InvestingPro data, 15 analysts have recently revised their earnings estimates downward, with the stock currently trading at a P/E ratio of 29.5x.

The financial data provider is scheduled to release its results for the quarter on June 23, with Evercore projecting adjusted earnings per share of $4.26, below the consensus estimate of $4.30, primarily due to a higher anticipated tax rate of 17.5% versus 16.9%. The company, currently valued at $15.9 billion, has demonstrated modest revenue growth of 4.7% over the last twelve months.

Evercore reduced its organic Annual Subscription Value (ASV) growth estimate to 4.2% year-over-year from its previous 4.7% forecast, aligning with the consensus expectation of 4.3% growth. The revision reflects lower annual price increases as inflation continues to moderate more than expected during the fiscal third quarter.

The firm cited the timing of price increases—international increases taking effect in April while Americas increases occurred in January—as a factor in its revised outlook. Evercore also noted that "Liberation Day tariff announcement" likely dampened sales activity during the March-May period.

Despite these concerns, Evercore observed a slight acceleration in average sell-side and buy-side employment growth in the fiscal third quarter compared to the second quarter, suggesting a potential improvement from the 4.1% ASV growth reported last quarter. For deeper insights into FactSet’s valuation metrics and growth prospects, InvestingPro subscribers can access comprehensive analysis including Fair Value estimates and additional financial health indicators in the Pro Research Report.

In other recent news, FactSet Research Systems reported its second-quarter earnings for fiscal year 2025, surpassing expectations with an adjusted earnings per share (EPS) of $4.28, compared to the forecasted $4.21. The company also reported revenues of $571 million, slightly above the anticipated $570.13 million, marking a year-over-year revenue growth of 4.5%. Despite these positive earnings results, BMO Capital Markets adjusted its outlook on FactSet, reducing the price target from $498 to $466, while maintaining a Market Perform rating. This adjustment reflects a more cautious stance due to broader economic conditions, despite FactSet’s strong earnings performance driven by improved margins.

RBC Capital maintained its Sector Perform rating for FactSet, with a price target of $503, citing confidence in the company’s fiscal year 2025 guidance and strong performance anticipated in the fourth quarter. Meanwhile, Raymond (NSE:RYMD) James reiterated its Underperform rating, expressing concerns over FactSet’s transition to a more cyclically affected business facing strong competition. FactSet’s recent acquisitions of Irwin and LiquidityBook were noted, with some analysts suggesting that the company might have overpaid to stimulate growth.

FactSet reaffirmed its guidance for organic Annual Subscription Value (ASV) growth, narrowing the range to $100-130 million, and expects accelerated growth in the second half of the fiscal year. The company has demonstrated robust performance with strategic acquisitions and product innovations, including the launch of GenAI SKUs and expansion of private company data coverage. Despite investor concerns over macroeconomic factors, FactSet’s management expressed increased confidence in its second-half performance, supported by a robust sales pipeline and successful renewal cycles.

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