Stifel: 3 Reasons To Like Intuit

Stifel is making a bullish case for software company Intuit Inc. INTU after sitting on the sidelines since at least June 2015.

The Analyst

Stifel's Brad Reback upgraded Intuit from Hold to Buy with a price target lifted from $197 to $240.

The Thesis

The bullish thesis for Intuit's stock is threefold, Reback said in the upgrade note:

The Consumer Tax business should sustain double-digit top-line growth, as it is well-positioned to take advantage of the growing "do-it-yourself" segment of the market, the analyst said. During the most recent tax filing season, the do-it-yourself category won another 50 basis points of market share. The company's main competitor, H & R Block Inc HRB announced the closing of 400 stores, which implies even more market share is "up for grabs" next year. 

Intuit's TurboTax business is projected to gain market share with new features like TurboTax Live, Reback said. This should help lower the annual churn of 3 million filers that leave the platform due to "increasingly complex tax situations," he said. 

Intuit's new offering Turbo is designed to offer customers an overall view of their financial health and profile by connecting them to third-party financial products that are designed by Intuit's partners, according to Stifel — giving the company a new "monetization engine" for future growth.

Price Action

Intuit shares were trading higher by 0.4 percent premarket Tuesday. 

Related Links:

The Bull And Bear Cases For Intuit After A Q3 Beat

3 Reasons Intuit Will Continue To Dominate The Tax Business