Piper Sandler Lifts Aspen Price Target By 19% To Reflect His Higher Growth Outlook Post Emerson Deal

Piper Sandler analyst Weston Twigg revisited his segment analysis on Aspen Technology, Inc AZPN to reflect commentary after the Emerson deal, in which AZPN received two new software suites.
Twigg sees the combined company set to grow annual revenue between 9-13%, up from the 5-12% pre-deal, and raised his FY2024 revenue moderately to reflect the midpoint.
He does not expect AZPN to accomplish its longer-term target of mid-teens (~15%) annual spend growth through FY2024.
However, transitioning from perpetual licenses to the OSI suite could be a moderate revenue headwind.
AZPN has indicated that its addressable market has likely doubled post-deal, to around $12 billion. The market likely includes markets where Emerson is reasonably strong, such as pharma, water/wastewater, pulp and paper, and food and beverage, as well as markets directly related to new software suites, such as mining and electrical grid optimization.
He saw the near-term end market breakdown as: 40% Oil and Gas; 16% EPC; 18% Chemicals; 22% Power; 4% other.
He rated the stock Neutral and bumped the price target by 19% to $189 to reflect his higher growth outlook and better-than-expected sentiment post-deal.
Price Action: AZPN shares traded lower by 2.09% at $192.68 on the last check Tuesday.

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