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Investing.com -- Autodesk received an upgrade to Buy from Deutsche Bank after the company delivered one of its strongest quarterly performances in several years, helping ease concerns about demand trends and margin potential.
The brokerage raised its target price to $375 from $345, citing broad upside across revenue, margins, billings and free cash flow in the fiscal third quarter.
Analysts said the results showed stronger execution in data center and infrastructure markets along with continued gains in construction, which they expect to support growth over the next several quarters.
Autodesk’s underlying growth of about 11.6% from a year earlier accelerated from recent quarters and topped its initial full year outlook of 8 to 9%. Deutsche Bank said fourth quarter guidance implies a similar pace and could reach about 12% if current trends continue.
Earlier worries about saturation in core architecture and engineering are now outweighed by expected share gains in construction and manufacturing, improved channel productivity as Autodesk moves past its transaction model transition, and pricing power on core products.
There is also confidence in Autodesk’s ability to exceed its fiscal 2029 margin goals of 41% reported and 45% excluding the transaction model, according to DB.
With normalized growth of about 10.5%, the bank sees a path to more than $16 in earnings per share by fiscal 2029. The analysts said Autodesk’s exposure to less digitally mature end markets limits risks from AI-driven disruption and the shortage of skilled labor gives the company an opening to expand its role in customer workflows.
Autodesk now trades at 26 times the bank’s updated 2026 earnings estimate, compared with peer averages of about 30. The new $375 target implies 28 times a discounted fiscal 2029 earnings estimate of $16.
Third quarter revenue rose to $1.853 billion from a year earlier, helped by stronger upfront revenue, enterprise renewals and momentum in its online store. Fourth quarter revenue guidance of $1.901 billion to $1.917 billion topped market expectations, and earnings guidance also came in ahead of estimates.