Fannie Mae, Freddie Mac shares tumble after conservatorship comments
Investing.com - Mizuho (NYSE:MFG) has reiterated an Outperform rating and $875.00 price target on Intuit (NASDAQ:INTU), which currently trades near its 52-week high of $790.60, following reports that the financial software company plans to reduce its workforce by approximately 600 employees in California. According to InvestingPro data, the company maintains a "GREAT" financial health score of 3.08 out of 4.
The workforce reduction would represent about 3-4% of Intuit’s total headcount and could potentially translate to 60-70 basis points of incremental operating margin expansion to Mizuho’s fiscal year 2026 forecast if fully realized. The company already demonstrates impressive efficiency with an 80.26% gross profit margin.
Mizuho attributes the layoffs to efficiency and productivity gains from Intuit’s internal use of artificial intelligence, highlighting that AI-driven margin expansion in software companies remains underappreciated by the market.
The research firm expects Intuit to provide its initial fiscal year 2026 guidance in August, which will likely include a conservative estimate of approximately 60 basis points in operating margin expansion, similar to fiscal year 2025.
Mizuho maintains its bullish outlook on Intuit, expressing confidence that the company can sustainably deliver 100+ basis points of margin expansion annually for years to come, supported by the efficiencies achieved through internal AI implementation.
In other recent news, Intuit has made several notable advancements that could impact investors’ perspectives. The company recently launched AI agents across its QuickBooks Online products, a move that Mizuho believes will simplify small business operations and reduce costs. This development led Mizuho to maintain its Outperform rating on Intuit, with a raised price target of $875. Additionally, Intuit acquired Relevvo, an AI-powered sales and marketing platform, to enhance its B2B engagement capabilities. The acquisition aims to strengthen Intuit’s service to mid-market customers by integrating Relevvo’s AI technology with Intuit’s existing customer data.
Furthermore, CLSA initiated coverage on Intuit with an Outperform rating and a $900 price target, citing the company’s potential to dominate the mid-market accounting software sector. BMO Capital also reiterated its Outperform rating, highlighting Intuit’s growth potential in the under-penetrated Assisted tax category and the QuickBooks business. The firm emphasized the role of AI innovations and financial technology offerings as growth drivers. These developments, along with Intuit’s strong fiscal performance and strategic initiatives, have positioned the company for continued growth in the financial software market.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.