Oppenheimer cuts Autodesk stock price target to $300

Tuesday, Autodesk shares may see changes in investor sentiment following a revised price target from Oppenheimer. Analyst Ken Wong at the firm has lowered the price target on Autodesk (NASDAQ:ADSK) to $300 from the previous $350, while maintaining an Outperform rating on the company's stock. The stock, currently trading near $244, has experienced a sharp 7.93% decline over the past week, with InvestingPro data indicating oversold conditions based on RSI indicators.

Wong's commentary highlighted several factors influencing Autodesk's outlook. The analyst noted that investor discussions lately have been dominated by potential tariff headwinds. However, conversations have shifted to the involvement of activist investor Starboard, Autodesk's long-term growth and operating targets, and potential areas for additional efficiencies. According to InvestingPro, 18 analysts have recently revised their earnings estimates upward for the upcoming period, suggesting growing confidence in the company's prospects.

The resilience of Autodesk's business amidst potential down cycles was a focal point in recent discussions with management, according to Wong. The company's recurring revenue, mission-critical offerings, and diversified operations were cited as strengths. This resilience is reflected in the company's impressive 91.96% gross profit margin and strong revenue growth of 11.53% over the last twelve months. Despite the ongoing transaction transition and macroeconomic uncertainties, Autodesk's management has indicated that they do not plan to update long-term growth targets during the upcoming Analyst Day. Instead, they may focus on profitability and the underlying drivers of growth.

Investor feedback, as mentioned by Wong, shows continued support for Starboard's initiatives aimed at improving profitability and governance. However, there is also a growing sentiment that the conversation should become more strategic, with specific actions outlined to win shareholder backing. Such actions could include market prioritization and possible divestitures.

The decision to lower Autodesk's price target to $300 reflects a recalibration based on lower market multiples, suggesting a more conservative valuation amidst the current market environment.

In other recent news, Autodesk, Inc. reported significant financial growth, with FY 2025 revenue reaching $6.1 billion, marking a 12% increase from the previous year. The company also achieved a non-GAAP operating margin of approximately 39% for the fiscal year, exceeding its target range ahead of schedule. Additionally, Autodesk announced a 22% growth in free cash flow, totaling $1.6 billion in FY 2025, and set a target of between $2.075 billion and $2.175 billion for FY 2026. In response to Starboard Value LP's criticisms, Autodesk highlighted these robust financial results and its commitment to shareholder value. Starboard, a major shareholder, has nominated three candidates for Autodesk's board, citing concerns about the company's performance and board oversight. Autodesk's board has seen recent changes, with two new independent directors appointed and two current directors not seeking re-election at the 2025 Annual Meeting. The company remains open to engaging with Starboard but noted that Starboard declined to participate in the director selection process. These developments follow Autodesk's proactive dialogue with investors and efforts to optimize its market strategy.

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