Aspen Technology Faces Chemical Business Headwinds: Analyst Downgrades Stock

KeyBanc Capital Market analyst Jason Celino downgraded Aspen Technology Inc AZPN to Sector Weight from Overweight.

The analyst expects challenged visibility in the chemicals business (~18% of revenue) for over two quarters until industry destocking dynamics normalize and customers reset capital expenditure budgets in early CY24.

Hence, the analyst thinks the company may have difficulty attaining over 9% annual spending growth in Heritage AspenTech in Q4.

Celino notes integration and execution challenges in OSI since acquisition closure, and they expect the combination of OSI and SSE to contribute 4 pts to FY23 growth but only 1-2 pts in FY24.

The analyst sees revenue of $326.6 million (vs. consensus $326.5 million) for Q4 FY23 and lowered the FY24 revenue outlook to $1.154 billion (from $1.174 billion vs. consensus $1.176 billion) to reflect high-single-digits growth expectation.

Price Action: AZPN shares are trading lower by 1.18% at $171.99 on the last check Wednesday.