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Investing.com - UBS upgraded FactSet Research Systems (NYSE:FDS) from Neutral to Buy on Monday, while lowering its price target to $425.00 from $480.00. The stock currently trades at $289.15, near its 52-week low of $288.84, after declining over 39% year-to-date.
The research firm cited the recent sell-off in FactSet shares, noting that the information services sector has been negatively impacted by concerns about AI disruption, which has weighed on stock multiples. According to InvestingPro data, the stock’s RSI suggests oversold conditions, while maintaining strong fundamentals with a 52.7% gross margin.
UBS believes the market underestimates the stickiness of FactSet’s solutions in what it describes as a slow-moving industry, while highlighting the company’s ability to quickly integrate AI technology.
The firm also pointed to FactSet’s successful execution on other new initiatives and expects near-term ASV (Annual Subscription Value) growth to continue accelerating.
According to UBS, the current stock price reflects expectations for low-single-digit growth, which the firm considers too conservative given FactSet’s performance and capabilities. The company has demonstrated consistent strength, maintaining dividend payments for 27 consecutive years and achieving a 5.4% revenue growth in the last twelve months.
In other recent news, FactSet Research Systems has reported its fiscal fourth-quarter results, revealing weaker-than-expected organic revenue growth, operating margins, and earnings per share. The company’s guidance for fiscal 2026 also fell short of market expectations for both top-line and bottom-line performance. Despite these challenges, FactSet’s organic Annual Subscription Value (ASV) growth reached 5.7%, surpassing both UBS’s estimate of 4.6% and the Street consensus of 4.9%.
Goldman Sachs responded to these developments by lowering its price target for FactSet to $282, maintaining a Sell rating, while UBS reiterated a Neutral rating with a price target of $480. Stifel also reduced its price target to $372, citing concerns over the company’s ongoing investment phase, while maintaining a Hold rating. BMO Capital adjusted its price target to $324, attributing the margin-driven earnings miss to higher technology expenses and increased bonus payments. Additionally, Wells Fargo lowered its price target to $296, maintaining an Underweight rating, due to AI competition concerns and FactSet’s forward guidance falling below Street estimates.
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