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Macquarie sees opportunity in Autodesk shares despite macro and model risks

EditorAhmed Abdulazez Abdulkadir
Published 12/13/2024, 02:08 AM
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On Thursday, Macquarie initiated coverage on Autodesk (NASDAQ:ADSK), a software company, with an Outperform rating and set a price target of $380. The firm suggests that investors consider purchasing Autodesk shares, citing potential upside catalysts such as free cash flow (FCF) outperformance, as well as improvements in profitability and stock-based compensation, excluding mergers and acquisitions (M&A) activities.

The analyst from Macquarie pointed out that there are several factors that could contribute to Autodesk's growth. These include the company's ability to outperform expectations in terms of free cash flow and the possibility of enhancements in both profitability and the management of stock-based compensation.

The firm also acknowledges risks that could affect the stock's performance. One of the risks highlighted is the potential for Autodesk's stock to have already experienced a significant run-up following activist engagement, with the stock currently trading near its 52-week high.

Additionally, uncertainties related to Autodesk's new transaction model and broader macroeconomic pressures are considered potential challenges for the company. For deeper insights into Autodesk's risk factors and comprehensive analysis, investors can access the detailed Pro Research Report available on InvestingPro.

Autodesk is known for its software products that cater to architecture, engineering, construction, manufacturing, media, and entertainment industries. The company's performance is closely watched by investors, given its role in these key sectors.

The Outperform rating suggests that Macquarie believes Autodesk's stock will perform better than the overall market or its sector in the foreseeable future. The price target of $380 indicates the firm's confidence in the stock's potential to reach this value, based on their analysis and the identified catalysts for growth.

In other recent news, Autodesk has seen significant developments, with an emphasis on earnings and revenue results. Autodesk recently reported an 11% year-over-year increase in its quarterly earnings, with Non-GAAP earnings per share of $2.17, surpassing estimates. The company's new transaction model is anticipated to contribute about $270 million to billings, adding 5.0-5.5 percentage points to the overall figures.

Several analyst firms have adjusted their outlooks on Autodesk. Citi reiterated its Buy rating, maintaining a price target of $361.00, while JPMorgan increased its stock price target to $300, maintaining a Neutral rating. UBS initiated coverage with a Buy rating, citing a potential 10% or more increase in revenue due to hiring and volume expectations. BMO Capital Markets maintained its Market Perform rating, raising the price target to $308.00, and Piper Sandler increased its price target to $311, keeping a Neutral rating.

Other company news includes the appointment of Janesh Moorjani as the new Chief Financial Officer, effective from December 16. Autodesk aims to maintain a 10-15% growth framework over the long term and is preparing for strong free cash flow growth in fiscal 2026.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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