Why These 4 Analysts Cut Intuit Price Target Even After Earnings Beat And Raised Guidance

Intuit Inc. INTU reported its fiscal third-quarter revenues and earnings higher than Street expectations and raised its full-year guidance.

Piper Sandler On Intuit: Analyst Arvind Ramnani maintained an Overweight rating on the company, while lowering the price target from $674 to $500.

“Growth was broad-based across all segments, with Credit Karma growing an impressive +48% y/y,” Ramnani said in a note to clients.

“Importantly, INTU remains confident despite a tough macro, given: resiliency in its tax and Credit Karma businesses, and increased SMB focus on financial performance, thereby improving uptake of digital financial tools such as QuickBooks,” the analyst wrote.

The price target had been revised to reflect a revision in multiples due to “peer group compression,” he added.

KeyBanc Capital Markets On Intuit: Analyst Josh Beck reiterated an Overweight rating, while reducing the price target from $600 to $500.

Intuit’s revenue was better than feared. The company indicated “no signs of macro weakness, perhaps best evidenced by 30% QB TPV growth in North America during April and in the last week,” Beck wrote in a note.

“Management outlined a position of greater strength relative to the GFC, a period in which it was still able to maintain MSD top-line growth,” the analyst said. He added, “We raise our estimates flowing through outperformance, though trim our price target to better reflect market conditions.”

Wells Fargo On Intuit: Analyst Michael Turrin maintained an Overweight rating on the company, while reducing the price target from $635 to $550.

“While this was the first time in quite a while where the tax-led consumer segment failed to outperform targets, FQ3 results showcased the benefits of diversification,” Turrin said in a note.

“Most notably from the QB-led SBSE segment, which grew +20% on an organic basis (inc. QBOA +32%, online services +28%) and Credit Karma, which grew +48% with management sounding confident the business is better diversified/less exposed from a macro perspective than investors were expecting,” the Wells Fargo analyst wrote.

He added, however, that the price target had been revised to reflect “recent multiple compression across software.”

BMO Capital Markets On Intuit: Analyst Daniel Jester reiterated an Outperform rating, while cutting the price target from $550 to $475.

“Despite a small miss in the US tax business which is now likely to grow at the low-end of the company’s previous guidance near 10% Y/Y, there was more to like elsewhere in the fiscal 3Q22 release, including 48% Y/Y growth in Credit Karma, better than expected performance in Small Business (QuickBooks), and a path for margin expansion this year excluding a one-time settlement,” Jester wrote in a note to clients.

“We think the quarter highlighted the resiliency of the platforms, which we anticipate will continue to be tested given numerous uncertainties facing small businesses,” the analyst said. He added, however, that the price target has been reduced to reflect a higher weighted average cost of capital.

INTU Price Action: Shares of Intuit had risen by 7.32% to $385.26 at the time of publication Tuesday, according to Benzinga Pro.