FactSet's Transition to Cloud Undervalued by Market, Analyst Upgrade Follows

Credit Suisse analyst Kevin Mcveigh upgraded FactSet Research Systems Inc FDS from Neutral to Outperform and raised the price target from $485 to $500, given a ~20% pullback on concerns of a more challenging environment.
Having long admired FactSet, the analyst saw potential multiple expansion with its pivot to the cloud and ability to resume buybacks in H223.
The market is not entirely discounting the cloud-native ecosystem FactSet has enhanced with $100 million in investments driving a data differentiation strategy of the private market and AI structure collecting and APIs/ personalization.
Increased disclosure on its cloud journey and client success at April investor day support the analyst's thesis that FactSet is a key "financial cloud client partner" and benefits from relationships with traditional cloud vendors. This fuels healthier annual subscription value [ASV] growth and margin expansion.
The stock could chart a path like Paychex, Inc PAYX, rerating closer to vertical software platforms like Clearwater Analytics Holdings, Inc CWAN.
Price Action: FDS shares traded higher by 0.27% at $413.93 on the last check Thursday.