BofA Raises Intuit Target On Long-Term Growth Drivers

Intuit Inc. INTU reported robust fourth-quarter results, driven by a strong tax season, resilience among small business customers and strength in the online ecosystem, according to BofA Securities.

The Intuit Analyst: Kash Rangan maintained a Buy rating for Intuit, while raising the price target from $320 to $380.

The Intuit Thesis: Despite COVID-19 pressures, the company reported its fourth-quarter revenues, earnings and operating margins ahead of BofA estimates, driven by strength in the Consumer and Small business segments, Rangan said in the note.

He raised the revenue and earnings estimates for fiscal 2021 from $8.152 billion to $8.391 billion and from $8.48 per share to $8.59 per share, respectively.

Although near-term headwinds remain, Intuit has a number of long-term drivers, the analyst noted. The company could continue to benefit in the long term from the shift to online and the adoption of TurboTax Live and QuickBooks Online.

Although Intuit may hire more tax professionals for these products, AI (artificial intelligence) will boost productivity, support margin stability, and offer upside in the long term, Rangan believes. He added that the Credit Karma acquisition expands the total addressable market, “offers an opportunity beyond consumer, and could drive the small business segment LT.”

INTU Price Action: Shares of Intuit traded higher by 1.76% to $342.34.